Centre Bans Onion Exports In A Bid To Tame Inflation

The Central Government on Monday banned the exports of all varieties of onion with immediate effect amid rising prices of onions in the country.

The Ministry of Commerce and Industry in a notification said “in the exercise of powers conferred by Section 3 of the Foreign Trade Act 1992, the Central Government has made these amendments in the export policy of onion.

The Directorate General of Foreign Trade said that onion prices in the country have shot up in recent past and there is a shortage in supply in the domestic market and in view of this, now all types of onion exports have been banned immediately. He said that Krishnapuram and Bangalore Rose onions are also included, which did not have any kind of export ban till now.

Vegetable vendors Shadab and Riyaz of Delhi's Ghazipur mandi said that some 10-12 days ago, onions was being sold for Rs 17-18 a kg. But due to lack of supply of onions coming from other states for the last 4-5 days, onion cost Rs 45-50 per kg. A seller named Kamal said that onion prices have increased in the last few days, resulting in a decrease in the number of customers.

Delhi: Sellers at Ghazipur Sabzi Mandi say they're receiving fewer customers now as prices of vegetables have risen over past few days. Kamal, an onion seller says, "Due to rainfall and flood in southern states and Bihar, there is shortfall in supply. So the prices have risen." pic.twitter.com/hjLptFySej

— ANI (@ANI) September 15, 2020

He said that due to rains and floods in the southern states and Bihar, there is a shortage in supply and hence prices have increased.

Azadpur vegetable market, Asia's largest market, one kg of onions cost Rs 45 to 50 kg. According to the vegetable traders here, rise in onion prices is due to damaged onion crop. Due to heavy rains in South Indian states, especially Karnataka, onion crop has suffered a lot this time. Onion prices have been rising since August 8 in wholesale mandis.

In the last few months, amid the Coronavirus pandemic, onion has been exported heavily. India exported $19.8 million dollars of onions during April-June, while last year, onions worth $44 million were exported. The largest exports of onion are from India to Bangladesh, Malaysia, UAE and Sri Lanka. In September 2019, the central government had banned the export of onions.

At that time, onion prices had gone up due to difference in demand and supply and even then there was a shortage of onion due to heavy rains and floods in major onion producing states including Maharashtra. However, this is not the first time that the price of onion has increased, before the end of December 2019 and in January this year, the price of onion in Delhi had exceeded Rs 100 per kg.