India has decided to keep the export ban on onions in place indefinitely. Delhi’s decision came just before the elections, which surprised many. However, due to this decision by India, it is believed that onion prices may increase in many countries around the world.
India is the world’s largest onion exporter. The ban was in effect from December of last year until March 31. ย Indian traders were hoping that the ban on exports would be lifted rather quickly, as onion prices in the local market have halved since the ban, Reuters reported. At the same time, newly produced onions have also arrived on the market.
But late on Friday, the government issued an order saying that the ongoing ban on exports would remain in place until further notice.
An executive of a Mumbai-based exporter said on condition of anonymity, “The decision to extend the ban is surprising, and there was no need for it.” This is because the supply is increasing due to the arrival of the current season’s onions in the market. At the same time, the price is coming down.
Onion production in India is highest in Maharashtra. The exporter from Mumbai said that the price of onion per 100 kg in some wholesale markets in that state has come down to Rs 1,200 (14 US dollars). Last December, this price was 4,500 rupees (53 US dollars).
India will have elections the following month. The seven-week election will go on as planned. In this election, Prime Minister Narendra Modi is running for re-election a third time.
Countries like Bangladesh, Malaysia, Nepal, and the UAE depend on onions imported from India to meet local demand. Delhi’s ban on onion exports has resulted in higher onion prices in a few of these nations.
As importers have little choice, many rival exporters will raise their prices as a result of India’s move, an executive at another Mumbai-based exporter told Reuters.
Countries like China and Egypt also export onions. But the advantage of India is that it takes very little time to deliver onions to importers. According to traders, more than half of the onions imported by Asian countries every year come from India.
India exported 2.5 million metric tons of onions last fiscal year. It was a record for India. The fiscal year in India runs from April 1 to March 31.
