India’s recent decision to lift the embargo on onion exports to six nations has yielded contrasting outcomes in neighboring countries. While Bangladesh has witnessed a decline in the price of this vital kitchen ingredient, reports indicate that Nepal may see a doubling of prices. On April 27, the Indian government permitted the export of 99,150 metric tons of onions to Bangladesh, the United Arab Emirates (UAE), Bhutan, Bahrain, Mauritius, and Sri Lanka. Subsequently, on May 4, it was announced that India would cease restrictions on onion exports from Friday onwards due to robust Kharif crop production in 2024, promising monsoon forecasts, and stable market conditions at both wholesale and retail levels.
Nidhi Khare, Secretary of the Department of Consumer Affairs, announced at a press conference in Delhi, “All constraints on onion exports have been abolished effective today.” She cited the Rabi 2024 production and anticipated Kharif yield as contributing factors, alongside the favorable monsoon forecast. She also emphasized the stability of the current market, both domestically and internationally, and the availability and pricing of onions. According to official estimates, Rabi 2024 onion production stands at approximately 191 lakh tonnes, a reassuring figure considering monthly domestic consumption of about 17 lakh tonnes.
What makes India a significant onion provider?
India ranks second globally in onion production after China, contributing roughly 20 percent of the world’s total output. The nation’s favorable climate, vast agricultural expanses, and well-established irrigation systems create optimal conditions for onion cultivation.
India boasts diverse agro-climatic conditions conducive to cultivating various onion varieties year-round. Major onion-producing states such as Maharashtra, Karnataka, Gujarat, Bihar, Madhya Pradesh, and Rajasthan possess soil and temperature conditions suitable for onion farming.
With its substantial production capacity, India ensures a consistent onion supply for both domestic consumption and export. The abundance of supply and relatively low production costs render Indian onions affordable for many nations, particularly in South Asia and West Asia.
India stands as a key onion exporter globally, shipping onions to Southeast Asia, West Asia, Europe, and North America. Through trade agreements with multiple nations, India facilitates smooth onion exports.
Global onion demand has steadily risen due to population growth, dietary shifts, and the popularity of cuisines reliant on onions. India’s ability to meet this escalating demand positions it as a reliable onion source worldwide.
India has developed an extensive network of cold storage facilities and efficient transportation systems, ensuring the preservation and timely distribution of onions both domestically and internationally.
Why did India impose a temporary onion export ban?
The ban aimed to ensure ample domestic onion supply amid projections of lower Kharif and Rabi crops in 2023-24 compared to the previous year, coupled with increased international demand. Export restrictions were enforced from December 8, 2023, to counter an estimated 20 percent decline in Kharif and late Kharif production, stabilizing prices until the arrival of the Rabi 2024 crop.
Onions can be grown as both Kharif and Rabi crops in India, depending on regional and climatic factors.
Kharif onions are sown during the monsoon season (around June-July) and harvested in autumn (around October-November), typically with a shorter shelf life, ideal for immediate consumption or processing.
Rabi onions are sown during winter (around October-November) and harvested in spring (around March-April), favored for their extended shelf life compared to Kharif onions.
India’s onion production spans both Kharif and Rabi seasons, with regional preferences based on climate, soil, and market dynamics, allowing for year-round cultivation and varying outcomes.
Which region leads in Indian onion production?
Maharashtra stands out as India’s foremost onion-producing state, playing a pivotal role in the nation’s total onion output. The state, notably in districts like Nashik, Pune, Ahmednagar, and Satara, serves as a major onion farming hub.
Maharashtra’s leadership in onion production stems from its conducive climate, extensive farmlands dedicated to onions, and established agricultural practices. The state cultivates onions throughout both Kharif and Rabi seasons, ensuring consistent supply and enabling it to serve as a primary onion source domestically and for export.
How has Bangladesh benefited from India’s onion export lift?
Following India’s decision, onion prices in Bangladesh have markedly decreased. Hili Bazar, situated in Dinajpur district near the India-Bangladesh border, acts as a significant trading post, especially through the Hili Land Port facilitating cross-border trade.
Reports indicate a Taka 10 per kg reduction in onion prices following news of resumed imports from India. However, there are concerns of market manipulation by traders, urging government intervention to regulate onion prices.
Abul Hasmat, an onion vendor in Hili Bazar, notes the release of stockpiled reserves due to India’s decision, potentially alleviating price pressures. Nevertheless, challenges persist for consumers grappling with inflated prices affecting household budgets.
Why are onion prices anticipated to rise in Nepal?
Although India has lifted the onion export ban, it has imposed a minimum export price of $550 per tonne. Despite onions currently priced at Nepali rupees NR60 per kg in Nepal, the new Indian condition may escalate prices to over NR100 per kg.
Binay Shrestha, information officer at the Kalimati Fruits and Vegetable Market Development Board, highlights the potential price surge due to India’s export terms. He also underscores the prevalence of onion smuggling from India to Nepal, driven by price disparities.
India’s decision to resume onion exports evokes mixed reactions, symbolizing relief for some and concern for others.