India has increased the minimum export price for onions. The government is forced to do this in order to keep enough onions for the domestic market. The measure was announced on Saturday and will take effect on October 29 and will remain in force until December 31. In addition, India wants to increase the intervention stock of onions.
The floor price for the export of onions has been set at $800 per tone FOB (delivered to the ship). To keep the onion price on the domestic market within limits, the government wants to buy 2 lakh tonnes (approximately 181.000 tonnes) of onions. This is in addition to the 5 million lakh tonnes (approximately 454.0000 tonnes) already purchased as intervention stock.
Export less
India already imposed a 40% export tax on onions in August. The summer and autumn have been dry in India, which means that the onions come to the market later and yields are lower. This is partly due to the weather phenomenon El Niño, which contributes to less precipitation on the subcontinent. Rising food prices in a broader sense have long been a point of attention for the Indian government and limiting exports is a tool that is being used more often. We have already seen this with rice and wheat, for example.