India lifts ban on onion exports, imposes minimum export price

Amid ongoing elections in the country, the Centre on Saturday lifted the ban on onion exports but imposed a minimum export price (MEP) of $550 per tonne. Additionally, a 40% duty was imposed on onion exports. 

"The decision of lifting the export ban and imposing 40% duty on top of $550 MEP per tonne has been taken after consultation with stakeholders, and assessing the supply, crop and prices situation," consumer affairs secretary Nidhi Khare told reporters on Saturday. 

"There is stability in market prices both at mandi and retail levels and ample availability of supply amid better rabi crop to cater to domestic consumption. It will help both farmers as well as consumers."

Khare explained that onion prices in the Lasalgaon market in Nashik have remained stable at ₹15 per kg since 22 April. Additionally, Rabi onion output is estimated at 19.1 million tonnes, sufficient to meet the monthly domestic demand of 1.7 million tonnes. Moreover, there is optimism regarding the upcoming Kharif crop due to forecasts of above-normal rainfall, she added.

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Onion farmers, mostly in Maharashtra, had been protesting against the export ban, citing loss of income.

Tight global supplies and a dry spell induced by the El Nino weather phenomenon had prompted the government to restrict onion exports during the 2023-24 financial year. On 8 December 2023, the government had banned the export of onions till 31 March 2024. 

“The export policy of Onions is amended from ‘prohibited’ to ‘free’ subject to MEP of USD 550 per metric tonne with immediate effect and until further orders,” a notification from the Directorate General of Foreign Trade (DGFT) said.

Santosh Sarangi, director general of DGFT, who was also present at the press conference, said that with these changes, the effective price of exports will be $770 per tonne, which is viable and in line with global prices.

According to data released by the farm ministry in March, India's onion production in 2023-24 is estimated at 25.5 million tonnes, down from 30.2 million tonnes last year. This decline has been attributed to a fall in output in Maharashtra, Karnataka, Andhra Pradesh, and Rajasthan.

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