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Indian govt officials say nod to onion export based on harvest season and crop, not dates of election
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
The average price of onion exports is between $550 and $600 per tonne, as government-to-government exports remained unaffected due to the lifting of the ban, as per government officials.
Union Government officials have indicated that the recent decision to re-allow the export of onions is based on the harvest season, quality of crop and domestic market prices and is not influenced by the dates of elections. The onion-growing areas of Maharashtra are slated to go to polls in the next three phases of the ongoing general elections—phase 3, phase 4 and phase 5—where there has been a continuing demand from farmers to remove the export ban.
Officials assured that the decisions by the government’s Interministerial Committee (IMC) on price control are immune to announcements by exporters’ bodies and shouldn’t be looked at in isolation.
On Saturday, India has allowed the export of onions from May 4, subject to a minimum export price (MEP) of $550 per tonne along with a 40% duty, which, according to government officials, have been fixed on the basis of the benchmarked free on board (FOB) price and the market situation.
The MEP is applicable to both red and white onions, though white onions usually get exported at higher prices, mostly in processed form, which is higher than the price of raw onions. As per government officials, the average price at which onions are being exported is $550 to $600 per tonne, even as government-to-government exports remained unaffected due to the lifting of the ban.
The estimated rabi season production in 2024, a good prospect of the kharif crop, and a stable domestic market situation at the mandi and retail level have been taken into account by officials while taking the decision. Officials pointed out that the onion prices in the Lasalgaon mandi have remained stable at ₹15/kg for the past few months and have even slid further after the ban on exports was lifted.
A high-level government committee had visited Maharashtra‘s onion growing areas of Nashik, Ahmednagar and Solapur for stakeholder consultation. They found good arrivals of onions in the mandi, which was also considered by the IMC on price control, which made the decision. Last year, the government imposed a ban on the export of onions to augment domestic availability in view of an estimated 20% fall in kharif and late kharif production.
Officials explained that for the first three months of harvest, dry conditions ensure little loss in the storage of onions. However, the losses can rise to 30–35% if storage takes place beyond three months. As onions can’t be stored beyond the shelf life of four to six months, the government reasoned that longer storage of onions would have increased the storage cost further.
In view of an average of 17 LMT of monthly consumption of onions in India, 5 LMT of buffer stock will be created this year too, as the officials said that a regular review of the supply and pricing situation would be undertaken.
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