Govt lifts ban on onion exports, sets floor price
NEW DELHI : The government on Saturday lifted its ban on export of onions as officials cited normal availability, stable prices and robust output from the winter crop, a move that will benefit traders and farmers of Maharashtra, the country’s biggest producer of the vegetable.
Simultaneously, India imposed a minimum export price (MEP) of $550 per tonne plus 40% tariff on outbound onion shipments. The floor price, below which traders can’t export, is designed to discourage cheap exports.
“The export policy of onion is amended from prohibited to free subject to MEP of $550 per metric tonne with immediate effect and until further orders,” the directorate general of foreign trade said in a notification on Saturday. India, the world’s biggest exporter of onion, banned overseas sales in December to boost local supplies after patchy rains in key states led to a 20% fall in output, worsening seasonal shortages and leading to a price spike.
The country’s ban had driven up prices of the vegetable for global buyers, from the Middle East to Bangladesh, who were left scrambling for cheaper alternatives.
Prior to the ban, the government had slapped a 40% duty on exports, a measure that failed to ease prices of the essential item, leading to a full prohibition on exports.
“The ban has been lifted basically taking into account reasonably comfortable rabi 2024 production of 19.1 million tonnes, good kharif prospects with above-normal monsoon forecast, international availability and current market situation,” consumer affairs secretary Nidhi Khare said. The country’s monthly consumption requirement is around 1.7 million tonnes.
“We will continue to monitor prices as usual. Prices have been stable at mandis (wholesale markets) and also at the retail level since April,” Khare said.