Government May Extend Onion Export Ban to February to Control Domestic Prices

According to a government official, India is likely to keep a ban on onion exports until February 2020 as domestic prices have increased after the harvest of summer-sown crops that were expected to boost supplies, was delayed and spoiled by unseasonal rainfall.  

The ban on overseas sales by India, world's largest exporter of the bulb, will keep prices elevated in Asia & require importers in Bangladesh, Sri Lanka and Nepal to find other sources to fulfill their demand.

In spite of the export ban enacted in September to keep domestic supply inside the country, prices went up after rain & floods in October and November limited the supply of onion, especially in Maharashtra, country's biggest producer.

According to data compiled by the National Horticultural Research & Development Foundation, wholesale onion prices are about Rs. 40/kg, down slightly from Rs. 55 earlier this month, which was highest in 6 years.

A senior government official at the Indian Department of Consumer Affairs said that "We will think about resuming exports after prices come down. But right now it is not possible".

On condition of anonymity he told that "From January onwards supplies are expected to increase meaningfully. Once prices come down to a comfortable level, say below Rs. 20 per kg then we can allow exports".

Government officials and onion growers had expected that the ban would be lifted by mid November anticipating high supplies from the summer crop.

Sakharam Darekar, a 79-year-old farmer from Ghodegaon village, 180 km east of Mumbai told, last month's heavy rains left fields waterlogged for many days, destroying onion crop on his 2-acre  plot that was ready for harvesting.

Not only this, rains have also deferred planting of the winter-sown crop by spoiling seedlings in the nurseries.

A farmer in the Nashik district of Maharashtra Dinesh Khairnar said, "I want to plant onion but seedlings are not available".

Since India's ban, onion prices have increased rapidly in Asia, forcing top buyers like Sri Lanka and Bangladesh to source the crop from China, Myanmar, Egypt and Turkey. However, hefty volumes lost will be difficult to replace as India exports over two million tonnes of onions per year.