Indian govt to import onions to combat shortages

The central Indian government has decided to import onions to meet the shortfall in domestic supply…

The central Indian government has decided to import onions to meet the shortfall in domestic supply after curbs on exports and countrywide stock limits failed to bring down the prices. State-owned trading company MMTC Ltd has issued a tender seeking bids to import 2,000 tons of onions by October end with a price cap of $352 per ton.

This comes against the backdrop of onion prices touching ₹80 per kg (€1.02) in some parts of the country because of supply disruption after floods in states such as Maharashtra in August.

The government had imposed a minimum export price of $850 per ton on onions on 13 September, but consumer affairs secretary A.K. Srivastava complained to the commerce ministry that exports are continuing unabated following which the directorate general of foreign trade banned exports.

The consumer affairs ministry also imposed stock limits on onion traders to facilitate release of stocks in the market and prevent hoarding. For retail traders, the stock limit is 10 tons and for wholesale traders it is 50 tons.

In 2018-19, the government had imported onions worth $1.1 million mostly from Afghanistan. India’s onion exports fell 10.7% to $154.5 million in April-July from a year ago. Malaysia, Bangladesh, Sri Lanka and the United Arab Emirates were the top importers of onion from India during this period.

As described, the ban on exports, which has come against this backdrop, has also become an irritant in the bilateral trade relationship with Bangladesh, with the country’s prime minister Sheikh Hasina raising the matter at a business forum meeting in Delhi last week.