No Relief for Onion Farmers in India

May 28, 2024 Onion

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:

State	Prices May, 2024	Prices April, 2024	Prices May, 2023	% Change(Over Previous Month)	% Change(Over Previous Year)
Kerala	3562	3408	5348	4.52	-33.4
Nagaland	3509	3950	5893	-11.16	-40.45
Meghalaya	3469	3500		-0.89	__
Manipur	3427	3279	2161	4.51	58.58
Tripura	2812	2429	2351	15.77	19.61
Odisha	2499	2434	1685	2.67	48.31
Bihar	2263	2262	1317	0.04	71.83
Himachal Pradesh	2217	2357	1550	-5.94	43.03
West Bengal	2105	1872	1497	12.45	40.61
Jammu and Kashmir	2055	2172	1288	-5.39	59.55
Goa	1849	1799	1138	2.78	62.48
NCT of Delhi	1707	1567	992	8.93	72.08
Chattisgarh	1650	1570	769	5.1	114.56
Uttrakhand	1601	1782	1223	-10.16	30.91
Uttar Pradesh	1589	1698	1141	-6.42	39.26
Karnataka	1536	1345	841	14.2	82.64
Chandigarh	1522	1634	990	-6.85	53.74
Punjab	1457	1528	915	-4.65	59.23
Telangana	1443	1335	1010	8.09	42.87
Maharashtra	1421	1203	687	18.12	106.84
Haryana	1420	1532	848	-7.31	67.45
Gujarat	1297	1207	895	7.46	44.92
Rajasthan	1184	1129	765	4.87	54.77
Andhra Pradesh	1172	1047	726	11.94	61.43
Madhya Pradesh	989	1200	589	-17.58	67.91
Andaman and Nicobar		6000	6000	__	__
Assam			1864	__	__