New Delhi: After the price of onions skyrocketed in India’s neighbouring countries following an export ban on the vegetable in India, questions have been raised on if India is losing an established international market for its produce as Nepal and others begin assessing alternatives to the Indian onion. At the same time, farmers who grew the crop expecting profits are consumed with worry due to falling domestic prices.
India had introduced a minimum export price of $800 per tonne on onion exports on October 28 this year. On December 8, the curbs on onion export were extended in the form of a total ban until March 31, 2024.
In response to the sweeping export ban, people in Nepal are grappling with a shortage of the kitchen staple.
The Nepal government has announced its decision to formally request India to send onions to address the scarcity that has affected markets in the country after onion importers expressed concerns about a potential shortage of the vegetable in Nepal.
“As per the request by onion traders, we have decided to request the Indian government to send onion to Nepal. We will send the request soon,” an official in Nepal’s industry ministry told the Kathmandu Post.
Nepal relies almost exclusively on India for all of its onion imports. Any ripples in onion supply from India have an amplified impact on Nepali markets.
Also read: India’s Onion Export Ban Hits Neighbouring Countries, Steep Price Hikes Reported
Losing international market
As per the Indian government’s directive, the export of onions may be allowed based on permission granted by the government of India to other countries based on the request of their governments.
Meanwhile, Nepali officials are also in discussions with onion importers to potentially source the vegetable from other countries like Pakistan and China.
Importing large quantities of onion from other countries, other than India, is not possible because it is a perishable commodity, said the government officials. “As no government bodies import onions, our role is to facilitate the importers,” said the officials.
“However, if it takes time to get the approval from the Indian government, we have an option to import from third countries, including China,” they added.
It may be noted that in the last fiscal year, Nepal imported around 190 tonnes of onions worth Rs 6.75 billion from India.
The ban has also led to onion smuggling across the porous borders with law enforcement seizing illegally imported onions on several occasions.
Domestic impact
The export ban has not only affected the price of onions internationally, but has also caused a price drop in the domestic market affecting farmer incomes.
Hundreds of onion farmers in Maharashtra’s Nashik district blocked the Mumbai-Agra Highway at three locations last week in protest of the government’s decision to ban the export of onions, Times of India reported.
Ongoing protests at onion markets in Lasalgaon, Nandgaon, Pimpalgaon, and Umarane in Nashik had led to temporary closure of operations in these areas.
After the imposition of MEP in October, the average wholesale prices of onions had dropped by 24% in the first five days to Rs 3,650 per quintal at the country’s largest wholesale onion market at Lasalgaon.
Maharashtra’s deputy chief ministers Ajit Pawar and Devendra Fadnavis rushed to New Delhi to meet Union home minister Amit Shah on Monday to discuss a possible way out of the total ban on onion exports, the Indian Express reported. The delegation might also include food and civil supplies minister Chhagan Bhujbal according to the report.
Maharashtra chief minister Eknath Shinde also had a telephonic conversation with Union consumers affairs minister Piyush Goyal on the issue. “We will find out a way so that farmers and customers do not face losses due to the ban on export of onions,” the Telegraph quoted Shinde as saying.
The state government is under significant pressure to alleviate the plight of farmers affected by the Union’s ban as the opposition also scaled up its attack on this front, Deccan Herald reported.
Onion farmers in Karnataka are also facing a significant economic setback as onion prices took a nosedive following the export ban. Farmers who managed to grow the crop despite drought conditions in Karnataka are now worried if they will get a good price for the produce.
N.M. Siddesh, president of the state onion farmers’ association, said that medium-quality onions were priced between Rs 4,500 and Rs 6,000 per quintal, with good quality onions fetching Rs 7,000 to Rs 8,000 per quintal before the ban. However, now the prices have come down to Rs 800 to 1,200 and Rs 2,000 to 2,500 for medium to good quality onions respectively.
“We are now planning to launch a massive protest against the crash in onion prices, demanding the government to lift the ban. We will soon hold a massive protest in Gadag,” said Salim Byhatti, president of the onion/potato merchants association, APMC, Hubballi.
Onion farmers have urged the government to announce a minimum support price for onions and lift the export ban to protect farmers from further losses.
