India lifts ban on onion exports. This does not mean that Indian onion exporters will be given free rein. The Narendra Modi government is introducing an export tax on top of the minimum export price, which is currently in force.
The total ban on onion exports was imposed in December and last March extended. This was done to keep the onions affordable for the Indian consumer. This irritates local farmers, who believe that the export ban keeps their sales price artificially low. Both the wholesale and consumer prices for onions have been stable in recent weeks. The Indian government thus dares to loosen the reins a little.
There is not yet much room for maneuver. The minimum export price for onions is $550 per tonne, plus an export tax of 40%. This brings the effective export price to $770 (€714) per tonne, according to Santosh Sarangi, director general of the Bureau of Foreign Trade. This is in line with world market prices, Sarangi told the Indian business magazine Mint.
Reasonable harvest expectation
On the domestic market, the grower price is fairly stable, at the equivalent of €0,17 per kilo, according to Mint. The Rabi onion crop (spring crop) is estimated at 19,1 million tonnes. That is more than enough to meet the domestic demand of 1,7 million tons per month. There is also optimism about the Kharif harvest (summer/autumn harvest), due to above-average rainfall. The total Indian onion harvest, according to the latest figures from the ministry of agriculture, amounted to 25,5 million tons in March, compared to 30,2 million tons a season earlier. The import ban was also less strict than the Indian government makes it seem. Export licenses have been issued for the United Arab Emirates and Bangladesh.