The union government will lift the ban on export of all varieties of onion from January 1 next year, a notification from the directorate general of foreign trade said Monday, as the supply crunch eases with good winter harvests and brisk imports.
“The export of all varieties of onions, as described above, has been made free from 01.02.2021,” the notification said.
On September 15, the government had banned the export of all varieties as a precautionary step since domestic supplies showed signs of depleting due to a bad winter crop and exports.
In the April-July period, the export of onions rose by an unusual 30%, causing prices to show signs of firming up.
Prices had jumped 30% at the wholesale level in that period, while retail prices had soared to Rs80-100 per kg in most urban centres of the country.
According to official trade data, the country exported $328 million worth of fresh onions and $ 112 million worth of dried onions in 2019-20. Between April and July 2020, exports of onions to neighbouring Bangladesh soared 157.7%.
Onion trade in the country suffers from classic price volatility, a term used for regular patterns of wild swings in prices. It is caused mainly because of supply-disrupting factors such as extreme weather, high losses from inadequate or improper storage or frequently shifting production levels, all of which can cause supplies to go from surplus to scanty in a matter of weeks.
“Onion prices have remained elevated during the festive season. The full year onion output will still likely drop by at least 10% due to weather-related damage to both the winter and summer crop. But good winter harvests have eased the supply crunch now,” said Abhishek Agrawal of Comtrade, a commodities trading firm.
The government previously banned onion exports in 2019 on September 29, after a bad crop crimped output. In December that year, prices soared to Rs80 per kg in the national capital. The government lifted the ban on March 15, 2020 before re-imposing it this September.
Since the bulb is a common base ingredient of most Indian dishes and widely consumed, consumers are quite sensitive to a rise in onion prices, relative to many other commodities.
