Government Decides to Import Onions to Meet Supply Shortage

Centre has decided to import onions to meet the shortage in domestic supply after curbs on exports & nationwide stock limits failed to reduce the prices. MMTC Ltd, State-owned trading company has issued tender seeking bids to import around 2,000 tonnes of onions till the end of this month (October) with a price limit of $352 per tonne.

The decision comes against the backdrop of onion prices reaching Rs. 80 per kg in some parts of India due to supply disruption after floods in states like Maharashtra in August.

On 13^th September 2019, Centre had imposed a minimum export price of $850 / tonne on onions, but Consumer Affairs Secretary A.K. Srivastava complained to the commerce ministry that exports are still continuing after which the directorate general of foreign trade had banned exports.

The consumer affairs ministry had imposed stock limits on onion traders to facilitate release of stocks in the mandis and prevent hoarding. For the retail traders, the stock limit is 100 quintals while for wholesale traders, it is 500 quintals.

To recall, in the year 2018-19, Central government had imported onions worth $1.1 million mainly from Afghanistan.

Onion exports of India dropped 10.7 percent to $154.5 million in April to July from a year ago. Bangladesh, Malaysia, Sri Lanka & the United Arab Emirates (UAE) were the top importers of onion from India during this time.

It is important to mention that the ban on exports that has come against this backdrop, has also become an annoyance in the mutual trade relationship with Bangladesh, with the country’s Prime Minister Sheikh Hasina raising the issue at a business forum meeting held in New Delhi last week.

Meanwhile, the Delhi government earlier this week had asked the concerned departments to increase the supply of subsidised onions all over Delhi in view of the high demand post the festival of Navratris.