Government Bans Onion Exports and Imposes Stock Limits to Control Price Rise

The Centre has banned exports and imposed nationwide stock limits on onions with immediate effect to control prices of the key kitchen ingredient. The ban comes after retail onion prices touched Rs.80 per kg in Delhi because of supply disruptions after floods in some states. A similar price trend prevails in other parts of India too.

Responding immediately on a letter from A.K. Srivastava, Consumer Affairs Secretary on Sunday to the Director General of foreign trade Mr. Alok Chaturvedi, the Commerce Ministry has notified a ban on exports of onion. Srivastava wrote that even after imposing a minimum export price of $850 / tonne on 13^th September 2019, onions export continued unabated. The letter said, “With a view to improve domestic availability & control prices, I request you to consider banning export of onions instantly".

A government official on condition of anonymity said, “The reported export below minimum export price to Sri Lanka and Bangladesh will be stopped immediately and strict action will be taken against those who are found to be violating government’s decision".

Onion exports in India dropped 10 percent to $154.5 million in April to July from a year ago. United Arab Emirates, Malaysia, Bangladesh and Sri Lanka were the top importers of onions from India during this period.

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

Food and Consumer Affairs Minister Ram Vilas Paswan in tweet said, “Till now, the state governments have been implementing the stock limit as per situation. For the first time, Central government has simultaneously imposed stock limits across the nation. Simultaneously, state governments have been asked to take strict action against hoarders. Soon, prices of onion will come down in the market”.

Devinder Sharma, Food & trade policy analyst wondered why the Centre did not show such promptness when onion prices crashed to Rs. 1 to 2 / kg, forcing farmers to throw away their produce.