MUMBAI: Government has extended
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. The ban was due to end 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.
Onion prices in some wholesale markets in Maharashtra, the biggest onion-producing state, have fallen to 1,200 rupees ($14) per 100 kg from 4,500 rupees in December, the executive said.
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 tons of onions in the financial year that ended on March 31, 2023.