Govt Buys 1,650 Tonnes of Onions at these Prices from Farmers for Export after 3 Months Pause

Key Highlights

• India resumes onion exports to Bangladesh after a three-month pause.
• National Cooperative Export Ltd (NCEL) will buy onions from traders at Rs 29/kg.
• An export quota of 1,650 tonnes was allocated to address surging domestic prices.
• The move aims to balance domestic needs while catering to international demand, ensuring market stability.

India is all set to resume its onion exports after a gap of over three months, with a plan to ship 1,650 tonnes of onions to Bangladesh. This decision comes amid concerns over the rising domestic prices and the need to maintain a balance between local demand and international trade.

Government Initiates Purchase from Farmers

The National Cooperative Export Ltd (NCEL), a government-owned export agency, has disclosed its intention to procure onions from private traders at a fixed rate of Rs 29 per kilogram for export to Bangladesh. This marks India's first official onion export since the ban imposed in December last year.

Export Quota Allocation

In early March, the Indian government permitted the export of 64,400 tonnes of onions to specific countries upon formal requests through diplomatic channels. Bangladesh secured the most of this quota with 50,000 tonnes, while the UAE received the remaining 14,400 tonnes.

Reasons Behind Export Ban

The restrictions on onion exports were primarily implemented to stabilize the domestic prices, which had surged to unprecedented levels. This move also aimed to mitigate the impact of reduced global supply, especially during periods of peak demand such as Ramadan in key markets like Bangladesh, West Asia, and Southeast Asia.

Impact on the Domestic Market

Wholesale onion prices in Maharashtra's Nashik district currently range from Rs 7 to Rs 16 per kilogram. With the ongoing arrival of fresh rabi harvest, further declines in prices are anticipated, benefiting consumers domestically.

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Profit Margins and Market Dynamics

While the exact selling price of onions to Bangladesh remains undisclosed, reports suggest significant profits for the export agency, given the current market rates in Bangladesh ranging between Rs 80 and Rs 90 per kilogram. India traditionally dominates the global onion market from January to March.

Past Export Performance and Government Regulations

Between April 2023 and August 2023, India exported a total of 975,000 tonnes of onions, with Bangladesh, Malaysia, and the UAE emerging as the top importing countries in terms of value. The government had earlier imposed restrictions on onion exports, including a minimum export price and export duty until the end of 2023.

Objectives of Resuming Exports

With the resumption of onion exports, India aims to strike a balance between domestic needs and international demand, ensuring stability in both local and global markets.

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CMV360 Says

The decision to resume onion exports to Bangladesh signifies a strategic move by the Indian government to manage its onion excess effectively while catering to the needs of its neighboring countries. This step is expected to bring relief to domestic consumers and strengthen India's position in the global onion market.