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Onions

India lifts export ban on onions but imposes duty

May 6, 2024 - Jurphaas Lugtenburg

India lifts the ban on onion exports. However, Indian onion exporters do not yet have free rein. The government of Narendra Modi is introducing an export duty on top of the current minimum export price.

The total ban on onion exports was imposed in December and extended until last March. This was done to keep onions affordable for Indian consumers, much to the annoyance of local farmers who believe that the export ban artificially keeps their selling price low. Both wholesale and consumer prices for onions have been stable in recent weeks. As a result, the Indian government is now willing to relax the restrictions slightly.

There is still not much leeway. The minimum export price for onions is $550 per ton, with an additional export duty of 40%. The effective export price thus amounts to $770 (€714) per ton, according to Santosh Sarangi, the Director-General of the Foreign Trade Office. This is in line with world market prices, Sarangi told the Indian business magazine Mint.

Reasonable harvest expectations
On the domestic market, the price for growers is relatively stable at approximately €0.17 per kilo, as reported by Mint. The Rabi onion harvest (spring harvest) is estimated at 19.1 million tons, which is more than enough to meet the domestic demand of 1.7 million tons per month. There is also optimism about the Kharif harvest (summer/autumn harvest) due to above-average rainfall. According to the most recent figures from the Ministry of Agriculture, the total Indian onion harvest in March is estimated at 25.5 million tons, compared to 30.2 million tons in the previous season. The import ban was also less strict than the Indian government made it out to be, as export permits were issued for the United Arab Emirates and Bangladesh.

Jurphaas Lugtenburg

Jurphaas Lugtenburg is a market specialist in onions, carrots, and commodities such as wheat, corn, and soybeans at DCA Market Intelligence. He combines his degree in business administration with a passion for farming.
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