Anurag Kumar
As a result of renewed supply and price pressures, the Union government imposed export restrictions on onions and established a floor price on shipments to foreign countries on Saturday.
In a week, retail prices for the vegetable in several cities have nearly doubled; in Delhi, it now costs between 50 and 60 rupees per kilogram, up from 25 to 30 rupees per kilogram. If supplies continue to be scarce during the ongoing holiday season, when demand for many food commodities increases, prices may increase even more.
The item will be subject to a minimum export price (MEP) of $800 per tonne on a freight-on-board basis beginning on October 29 and continuing until December 31, according to a notification from the directorate general of foreign trade. An exceptional variant of the bulb has been granted an exemption from the export restriction.
Below the MEP price threshold, merchants are prohibited from selling to global buyers. Its purpose is to restrict inexpensive exports and increase domestic availability, thereby contributing to the reduction of prices.
On Saturday, the government announced that it would acquire an additional 200,000 metric tons of onions to supplement the 500,000 metric tons that it had already purchased as buffer stock. The government will continue to sell scallions in approximately sixteen cities where prices were soaring, according to an official.
The export bans on onions are implemented prior to the general election of the following year and elections in five states, during which Prime Minister Narendra Modi will attempt to secure an unprecedented third term in office. Because onions are a fundamental component of the majority of Indian dishes, consumers are sensitive to any price increase.
Market supplies have diminished as a result of harvest delays and reduced crop size subsequent to an uneven summer monsoon. “By limiting the quantity of onions exported in 2023, an effort has been made to ensure that domestic consumers have adequate access to onions at reasonable prices during this period of diminishing stored onion supplies,” a statement read.
Households were forced to purchase onions at subsidized rates from the government’s own inventories in August, as prices plummeted to a decade-high level.
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NCCF and NAFED, two state-supported food agencies, were instructed by the department of consumer affairs to purchase an additional 100,000 tonnes each in addition to “calibrated disposal of the procured stocks in major consumption centers” in order to meet the additional procurement target.
