Govt bans onion export with immediate effect to curb prices
Retail onion price was ruling at Rs 60/kg in cities like Delhi, Mumbai and Lucknow last week and was being sold at Rs 58/kg in Mumbai and Rs 42/kg in Chennai. In Kanpur, onion prices were at Rs 70/kg and at Rs 80/kg in Port Blair.
The Union government on Sunday announced an immediate ban on the export of all varieties of onion in a bid to control the soaring prices of India’s kitchen staple.
The export policy of onion is amended from free to prohibited till further orders.
"Export policy of onion for the item description at Serial Number 51 & 52 of Chapter 7 of Schedule 2 of ITC (HS) classification of Export & Import Items is amended from free to prohibited till further orders." The Ministry of Commerce & Industry further stated.
The surge in onion prices is said to be due to a depleted supply following months of incessant rainfall and flood-like situation in onion-producing states in the country.
Last week, retail prices of onion continued to remain high at Rs 70-80 per kg in the national capital Delhi and other parts of the country.
As per data maintained by the consumer affairs ministry, retail onion price was ruling at Rs 60/kg in cities like Delhi, Mumbai and Lucknow last week. It was being sold at Rs 58/kg in Mumbai and Rs 42/kg in Chennai. In Kanpur, onion prices were at Rs 70/kg and at Rs 80/kg in Port Blair.
The analysis of government data reveals that the onion production in the month of September this year is comparatively less than that in 2018.
According to data from National Horticultural Research & Development Foundation (NHRDF), the average total onion production (all of India) in September for the last four years stood close to 5.5 lakh metric tonnes. This year until September 29, just 3.94 lakh metric tonnes has entered the market.
The numbers show that 2019 recorded a deficit of 35 per cent in onion supply this year and unable to cope with the demand, prices have shot up.
This latest directive comes a couple of weeks after the central government slapped a steep Minimum Export Price (MEP) of $850 per tonne on onions—for the first time this year—virtually putting brakes on the export of the produce.
In simple words, it meant that the exports won’t be allowed if the consignments are priced below $850 per tonne.
During the financial year 2018-19, India had exported 21.82 lakh tonnes of the bulb.
To augment onion supplies to the markets, a team of two joint secretary level officers have been sent to Maharashtra to talk to the farmers, traders & transporters to assess availability of onions and to persuade them to bring more onions to the market. @PMOIndia @jagograhakjago— Ram Vilas Paswan (@irvpaswan) September 26, 2019
Earlier this month, the state-owned MMTC Ltd had floated a tender for import of onions from “Pakistan, Egypt, China, Afghanistan or any other origin”.
This move, however, has been criticised by farmers. The delivery of shipments is expected to be around November-end.
The government directive to ban the export of onions entirely is the fourth such intervention to control the prices. In June, the Centre had done away with the 10 per cent export subsidy declared on the bulb.