New Delhi/Mumbai: India has delivered a surprise blow to onion markets worldwide by extending its ban on onion exports indefinitely, just ahead of a significant general election. This move is expected to further exacerbate high prices in international markets, with India being the largest exporter of this essential vegetable.
Initially imposed in December, the ban on onion exports was slated to expire on March 31. Traders had anticipated a lift on the ban, given the significant drop in local prices since the implementation of export restrictions and the emergence of fresh supplies from this season’s crop.
However, in a late-night order issued on Friday, the Indian government declared that the ban would persist until further notice, catching many by surprise.
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An executive from a Mumbai-based export firm, preferring anonymity, expressed bewilderment at the extension, deeming it “surprising and completely unnecessary” given the downward trend in prices and the increased availability of onions from the new season’s crop. Prices in Maharashtra, the leading onion-producing state, have plummeted from 4,500 rupees to 1,200 rupees per 100 kg since December, as per the executive’s observation.
According to media reports, experts assert that Prime Minister Narendra Modi, aiming for a historic third consecutive term, faces upcoming elections scheduled over nearly seven weeks starting from April 19. The timing of the export ban extension could carry significant political implications.
Countries such as Bangladesh, Malaysia, Nepal, and the United Arab Emirates heavily rely on onion imports from India to bridge domestic supply gaps. With the ban in place, these nations have been grappling with soaring onion prices.
According to an executive from another Mumbai-based export company, India’s decision has provided an opportunity for rival exporters to inflate prices since buyers are left with limited alternatives.
Traders estimate that India, with its expedited shipment times compared to competitors like China or Egypt, fulfills over half of all onion imports by Asian countries.
In the previous financial year ending on March 31, 2023, India recorded a record-high onion export of 2.5 million metric tons.
