India decides to extend onion export ban indefinitely

In a statement issued on March 22 by the Directorate General of Foreign Trade of India, under the Ministry of Commerce and Industry of India, the Indian government has decided to extend the ban on onion exports until further orders to increase domestic supply and control onion prices. Previously, onion exports were banned until March 31 this year.

On December 8, 2023, the Indian government banned onion exports. However, it allowed onion exports to friendly countries on a case-by-case basis. India allowed the export of 64,400 tonnes of onions to the UAE and Bangladesh through the National Cooperative Exports Limited (NCEL).

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Previously, in October 2023, the government decided to promote the sale of reserve mattresses at subsidized prices. ₹25/kg (Indian Rupee) in retail markets to support consumers. The government imposed a minimum export price (MEP) of $800/tonne on onion exports from October 28 to December 31, 2023 to control rising prices. In August, India imposed a 40% export duty on onions until December 31, 2023. In the 2023 crop year, onion production is estimated at 22.7 million tonnes.

India has extended its ban on onion exports indefinitely, a surprise move ahead of a general election that could send prices soaring in some overseas markets. The ban, imposed by India - the world's biggest exporter of the vegetable - in December last year, was due to expire on March 31. Traders had expected the ban to be lifted as domestic prices have more than halved since the export restrictions were implemented and the crop has been short-lived, providing fresh supplies.

However, the government issued an order late on March 22 that the ban would remain in place until further notice. An executive at a Mumbai-based exporter said the extension was surprising and completely unnecessary, considering the fall in prices due to increased supplies from the new crop. Onion prices in some wholesale markets in Maharashtra, the largest onion-producing state, have fallen to 1,200 rupees ($14) per 100 kg from 4,500 rupees in December, the executive said.

Prime Minister Narendra Modi is seeking a record-equalling third consecutive term in the upcoming elections, which will be held in nearly seven weeks from April 19. Countries such as Bangladesh, Malaysia, Nepal and the United Arab Emirates rely on imports from India to fill the gap in domestic onion supplies, and many of them have struggled with high prices since the ban.

India’s move is allowing rival exporters to quote much higher prices because buyers have no other choice, a Mumbai-based exporter said. Traders estimate that India, which has shorter shipping times than rivals such as China or Egypt in many markets, accounts for more than half of all Asian onion imports. India exported a record 2.5 million tonnes of onions in the fiscal year ended March 31, 2023.

Source: https://congthuong.vn/an-do-quyet-dinh-gia-han-lenh-cam-xuat-khau-hanh-tay-vo-thoi-han-310690.html