India Region

No Relief for Onion Farmers in India

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28 May 2024, New Delhi: The government has lifted the ban on onion exports, but the high Minimum Export Price (MEP) and 40 percent export duty on top of that have made exports impossible. The minimum export price has been set at US$550 plus export duty of 40%, making the effective export price US$770 per tonne. In Indian rupees, it is approximately Rs 64/kg.

The Indian government has opened up exports for onions but at this high rate, exporters are finding it difficult to export onions.

Onion production in India is mainly in Maharashtra, Karnataka, Telangana, Haryana, Gujarat, Rajasthan, Andhra Pradesh and Madhya Pradesh. The average price in these states has increased by 66% compared to last year in May 2023. The average price prevailing in these states in May 2024 is around Rs 1307 per quintal, whereas last year in May 2023 it was Rs 795 per quintal.

The ban on onion exports was imposed in October when supplies were reduced due to a drop in production. Farmers faced low prices due to this ban and protested. The ban was lifted in May 2024, but a minimum export price of $550 per tonne and an export duty of 40 percent were imposed, making exports still impossible.

Trader’s Perspective

According to Nashik traders, prices in the UAE, which is the largest importer of Indian onions, have fallen sharply. Before the ban was lifted, the price of onion in Dubai was 2 dirhams, which is around 45 rupees, now it has come down to 1 dirham i.e. 22 rupees. The price of export-quality onion is Rs 2000 to Rs 2200 per quintal, while the total cost of sending it to Dubai is Rs 40-45 per kg, making export no longer profitable.

Due to a fall in onion prices in international markets and heavy export duty, onion exports from India have become almost non-existent. Traders in Nashik, Maharashtra said that the export of onion to the United Arab Emirates (UAE) is no longer practical as the prices there have fallen drastically.

Competitiveness in International Market

Due to export duty, Indian onion is no longer competitive in the international market. The average price of onion in Nashik’s Lasalgaon mandi remains at Rs 1400-1500 per quintal, which is unlikely to increase until exports improve. Additionally, exports from Janori Inland Container Depot have seen a 50 percent decline. Exporters are demanding that export duty and minimum export prices be removed so that exports can increase again.

Comparative Analysis: Onion Prices and Their Growth

As per the chart given below, onion prices and their percentage growth in different states in May 2024 are shown:

StatePrices May, 2024Prices April, 2024Prices May, 2023% Change(Over Previous Month)% Change(Over Previous Year)
Himachal Pradesh221723571550-5.9443.03
West Bengal21051872149712.4540.61
Jammu and Kashmir205521721288-5.3959.55
NCT of Delhi170715679928.9372.08
Uttar Pradesh158916981141-6.4239.26
Andhra Pradesh1172104772611.9461.43
Madhya Pradesh9891200589-17.5867.91
Andaman and Nicobar60006000____

Also Read: Sharbati Wheat of Madhya Pradesh Still Fetching Highest Bid in Market

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