India has extended its ban on onion exports indefinitely, affecting overseas markets and exacerbating high prices. Despite anticipation of the ban being lifted due to falling local prices and fresh supplies, the government unexpectedly issued an order to keep it in place until further notice. This move has impacted countries reliant on Indian onion imports.
India has extended its ban on onion exports indefinitely – a surprise move that comes ahead of a general election and is set to exacerbate high prices in some overseas markets.
Imposed by India – the world’s biggest exporter of the vegetable – in December, the ban was due to expire on March 31. Traders had anticipated it would be lifted as local prices have more than halved since the export restrictions were implemented and this season’s crop is yielding fresh supplies.
However, the government issued an order late on Friday that the ban will remain in place until further notice.
“The extension is surprising and completely unnecessary, considering the falling prices with rising supplies from the new season crop,” said an executive at a Mumbai-based export firm, who declined to be identified.
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Onion prices in some wholesale markets in Maharashtra, the biggest onion-producing state, have fallen to INR1,200 ($14) per 100 kilogrammes from INR4,500 in December, the executive said.
Prime Minister Narendra Modi is seeking a record-equalling third straight term in upcoming elections that will be held over almost seven weeks from April 19.
Countries such as Bangladesh, Malaysia, Nepal and the United Arab Emirates rely on imports from India to fill domestic gaps in onion supply and many of those nations have struggled with high prices since the ban.
“India’s move is allowing rival exporters to quote much higher prices since buyers have no choice,” said another executive at an export company based in Mumbai.
Traders estimate that India, which has shorter shipment times than rivals such as China or Egypt for many markets, accounts for more than half of all onion imports by Asian countries.
India exported a record 2.5 million metric tonnes of onions in the financial year that ended on March 31, 2023.
In a significant development, India has opted to extend the ban on onion exports indefinitely, just ahead of the upcoming general election. This move has sparked discussions and concerns about its implications for the agricultural sector and the economy as a whole. Onions are a staple vegetable in Indian cuisine and a significant cash crop for farmers. The decision to prolong the export ban aims to stabilize domestic prices and ensure ample supply for consumers within the country. However, this restriction has raised questions about the potential impact on farmers who heavily rely on onion cultivation for their livelihood. Additionally, the ban’s influence on international markets and trade partnerships is a subject of interest. It is worth examining the multifaceted effects of the prolonged export ban on onions and the broader agricultural and economic landscape of India.
Source: ARY NEWS
India has extended the ban on onion exports indefinitely, surprising traders and causing unnecessary price increases in overseas markets. This move comes ahead of a general election, further exacerbating high prices. Despite falling local prices and increased supplies from the new season crop, the ban will remain in place until further notice. The ban has affected countries like Bangladesh, Malaysia, Nepal, and the United Arab Emirates, allowing rival exporters to quote higher prices. India’s shorter shipment times make it a key onion exporter in the Asian market, accounting for more than half of all onion imports.
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