Farmers there have been demanding lifting the ban on exports, as modal mandi prices at Lasalgaon in Nashik—the hub of the country’s wholesale trade—are around Rs 15/kg, which are close to cost of production.
Lifting the ban on onion exports imposed in December last year, the government on Saturday imposed a minimum export price (MEP) of $550 per tonne, as per a directorate general of foreign trade (DGFT) notification. A 40% export duty on staple vegetables has also been introduced from Friday.
Santosh Kumar Sarangi, director general, DGFT, said onion shipments are being allowed at a minimum price of $770/tonne or around Rs 64/kg, which, traders say, is on a higher side for boosting exports. “Keeping into consideration the current market supply and global availability and prices, it has been decided to lift the ban on onion exports,” Sarangi said.
The move comes just before the onion growing regions of Maharashtra vote for the Lok Sabha elections. Farmers there have been demanding lifting the ban on exports, as modal mandi prices at Lasalgaon in Nashik—the hub of the country’s wholesale trade—are around Rs 15/kg, which are close to cost of production.
“At such a high price band, it would be difficult to export onions, as Rs 64/kg is steep for intended markets,” Jaydutt Holkar, director, agricultural produce market committee (APMC), Lasalgaon, told FE.
Nidhi Khare, secretary, department of consumer affairs, said the estimated rabi crop (2024-25), which has a share of around 60% total annual output, is projected at around 19.1 million tonne (MT), which is ‘reasonably comfortable’, considering monthly domestic consumption is around 1.7 MT. “With a good kharif prospect due to ‘above-normal’ monsoon forecast, the availability of onion is at a comfortable level till arrival of kharif output,” Khare said. She said as a perishable crop, onion has to be consumed either domestically or through export within five-six months of harvesting and holding on to the rabi stock beyond shelf life would only increase storage losses.
In March, while extending the onion export prohibition indefinitely, an official note stated that the move was necessitated by the overall domestic availability against prevailing international prices and global availability concerns. Officials said the decision to ban onion exports last year was aimed at increasing domestic supply against an estimated 20% decline in kharif and late kharif production. “The policy had helped in maintaining stable prices till arrival of rabi-2024 crop last month,” said an official.
While the government had earlier put onion export under ‘prohibited’ category, it approved exports of close to 0.1 million tonne (MT) of onion to six countries—Bangladesh, United Arab Emirate (UAE), Sri Lanka, Bahrain, Mauritius and Bhutan.
In FY24, India exported around 1.8 MT of onion, mostly to Bangladesh, Malaysia, UAE, Sri Lanka and Nepal. The modal retail prices are currently ruling at Rs 30/kg against Rs 20/kg reported a year back. Retail inflation in onions was 36.88% in March.
The export ban in December last year was the first intervention in onion exports since January 2021. The government has not imposed a ban on onion exports since 2021, which was the norm a few years back.
Meanwhile, under the price stabilisation fund (PSF), the government directed National Cooperative Consumers Federation and farmers’ cooperative Nafed to initiate procurement of 0.5 MT of onion at market price as buffer from the farmers as rabi harvest has started to arrive in the market. During the last financial year (2023-24), 0.64 MT of onion had been procured under PSF. Onion purchased this way is used as buffer stocking as well as intervention by way of simultaneous procurement and disposal to curb the possibility of spike in prices.
The agriculture ministry recently estimated that onion production is likely to fall by 16% to 25.47 MT in the current crop year (July-June) compared to 2022-23 due to a decrease of 3.43 MT in Maharashtra, the biggest producer of the staple vegetable.
Source:financialexpress.com