The National Cooperative Export Ltd (NCEL), India’s export agency, has unveiled plans to procure 1,650 tonnes of onions from private traders at Rs 29/kg for export to Bangladesh, marking the first official export of onions from India in over three months. This decision follows the government’s ban on onion exports from December 8 to March 31, aimed at curbing soaring domestic prices. In the wake of the ban, concerns arose over affordability and availability, prompting the Centre to allow limited exports to countries like Bangladesh and the UAE, totalling 64,400 tonnes.
Export restrictions on onions were imposed to stabilize domestic prices, which had surged, causing worries about accessibility. However, this led to a shortage in international markets, especially during Ramadan. Onion exporters noted a rise in smuggling activities during the ban period.
Wholesale onion prices in Maharashtra’s Nashik district currently range from Rs 7/kg to Rs 16/kg and are anticipated to decrease further with the arrival of fresh rabi harvest. While the exact selling price to Bangladesh remains undisclosed, projections suggest profitable returns for NCEL, as Bangladeshi markets witness onion prices between Rs 80-90/kg.
Despite India’s dominance in the global onion market typically observed from January to March, this year, the arrival of new crops from Egypt and Turkey in May is expected to ease global shortages. Between April 2023 and August 2023, India exported 975,000 tonnes of onions, with Bangladesh, Malaysia, and the UAE being the top importing countries in terms of value.
Initially, the Indian government-imposed export restrictions in October 2023, implementing a minimum export price (MEP) of $800 per tonne and a 40% export duty on onions until December 31, 2023.
The decision by the National Cooperative Export Ltd (NCEL) to resume onion exports to Bangladesh signifies a pivotal step towards addressing the fluctuating onion market dynamics in India. While the temporary ban on exports aimed to stabilize domestic prices, it inadvertently led to concerns over accessibility and contributed to a spike in international prices. The strategic allocation of export quotas to select countries, including Bangladesh and the UAE, reflects the government’s efforts to balance domestic needs with international obligations.
Looking ahead, the resumption of onion exports underscores the resilience and adaptability of India’s agricultural sector. As wholesale prices in key producing regions like Maharashtra witness a decline with the influx of fresh harvests, the move to export onions to Bangladesh holds promising prospects for both NCEL and Indian farmers.
Moreover, the diversification of India’s onion export destinations, coupled with emerging markets in Southeast Asia and West Asia, presents opportunities for sustained growth and market expansion. With India traditionally dominating the global onion market in the early months of the year, the arrival of new crops from Egypt and Turkey is poised to alleviate international shortages, ensuring stability in global onion supply chains.
Overall, the resumption of onion exports signals a return to normalcy in India’s agricultural trade, underscoring the sector’s resilience amidst challenges. As the country navigates through dynamic market conditions, collaborative efforts between government agencies, exporters, and farmers will be crucial in ensuring a balanced and sustainable onion trade ecosystem.