Govt lifts ban on onion exports with price rider

New Delhi: The Government on Saturday lifted the ban on onion exports after about half a year, according to a notification from the Directorate General of Foreign Trade (DGFT).

"The export policy of onions is amended from “prohibited to free” subject to a minimum export price of $550 per metric ton with immediate effect and until further orders," the DGFT notification states.

The move forms part of the government’s balancing act to assure farmers a higher price as well as keep inflation in check so that consumers are not hit.

On April 27, the Government allowed the export of 99,150 metric tonnes of onion to six neighbouring countries -- Bangladesh, UAE, Bhutan, Bahrain, Mauritius and Sri Lanka.

On December 8, 2023, the government banned the export of onions from March 31 this year. The ban was imposed to ensure adequate domestic availability and keep prices in check as the outputs of both the Kharif and Rabi crops in 2023-24 are estimated to be lower as compared to the previous year and demand has increased in the international market.

The National Cooperative Exports Limited (NCEL), the agency for export of onion to these countries, sourced the domestic onions to be exported through e-platform at L1 prices and supplied to the agencies nominated by the government of the destination country at the negotiated rate on 100 per cent advance payment basis, according to the Food Ministry.

The offer rate of NCEL to the buyers takes into account the prevailing prices in the destination market and also international and domestic markets. The quotas allocated for export to the six countries are being supplied as per requisition made by these destination countries.

As the largest producer of onion in the country, Maharashtra is the major supplier of onions sourced by NCEL for export.

The Government had also allowed the export of 2000 metric tonnes (MT) of white onion cultivated especially for export markets in the Middle East and some European countries. Being purely export-oriented, the production cost of the white onion is higher than other onions due to higher seed cost, adoption of good agricultural practice (GAP) and compliance with strict maximum residue limits (MRL) requirements.

The procurement target for onion buffer out of Rabi-2024 under the Price Stabilisation Fund (PSF) of the Department of Consumer Affairs has been fixed at 5 lakh tons this year. Central agencies NCCF and NAFED are tying up local agencies such as FPOs/FPCs/PACs to support the procurement, storage and farmers’ registration to begin the procurement of any store-worthy onion. A high-level team of the Department of Consumer Affairs, NCCF and NAFED visited Nashik and Ahmednagar districts of Maharashtra from April 11-13, 2024 to create awareness among the farmers, FPOs/FPCs and PACs about the procurement of 5 LMT of onion for PSF buffer.

In order to reduce the storage loss of onions, the Department of Consumer Affairs decided to enhance the quantum of stocks to be irradiated and cold stored from 1200 MT last year to over 5000 MT this year, with technical support from BARC, Mumbai. The pilot of onion irradiation and cold storage taken up last year has been found to have resulted in the reduction of storage loss to less than 10 per cent.