Despite a significant drop in local onion prices since the implementation of export restrictions, the Indian government has opted to maintain the ban until further notice, as per an order issued late on Friday
In a surprising move that sent ripples across global markets, India has extended its ban on onion exports indefinitely, just ahead of a general election. The decision, reported by Reuters via Gulf Business, marks a continuation of measures initiated in December by the world’s leading exporter of the vegetable.
Initially slated to conclude on March 31, the ban’s extension has caught many traders off guard. Despite a significant drop in local onion prices since the implementation of export restrictions, the Indian government has opted to maintain the ban until further notice, as per an order issued late on Friday.
Traders, anticipating a lift on the ban due to ample supplies from the new crop season, have expressed bewilderment at the decision. Prices in Maharashtra, India’s largest onion-producing state, have plummeted from 4,500 rupees to 1,200 rupees per 100 kg since December, underscoring the surplus.
This ban move follows previous restrictions on wheat and certain rice varieties in 2023, further complicating the global food market landscape. India’s efforts to protect domestic supplies and stabilize prices continue to reverberate globally, influencing trade dynamics and commodity markets
Prime Minister Narendra Modi’s bid for a third consecutive term adds a political dimension to the timing of the extension. With elections spanning nearly seven weeks from April 19, the government’s move to shore up domestic supplies could carry electoral significance.
The ramifications extend beyond India’s borders, particularly for countries heavily reliant on Indian onion imports such as the UAE, Bangladesh, Malaysia, and Nepal. These nations have grappled with soaring prices since the ban’s imposition.
While India has granted exemptions for onion exports to select friendly nations, the limited availability has allowed rival exporters to capitalize on the situation by quoting significantly higher prices, leaving buyers with limited options.
Traders estimate that India constitutes over half of all onion imports by Asian countries, underscoring its pivotal role in regional markets. In the previous financial year, India set a record by exporting 2.5 million metric tons of onions.
This move follows previous restrictions on wheat and certain rice varieties in 2023, further complicating the global food market landscape. India’s efforts to protect domestic supplies and stabilize prices continue to reverberate globally, influencing trade dynamics and commodity markets.
**********************************
Readers
These are extraordinary times. All of us have to rely on high-impact, trustworthy journalism. And this is especially true of the Indian Diaspora. Members of the Indian community overseas cannot be fed with inaccurate news.
Pravasi Samwad is a venture that has no shareholders. It is the result of an impassioned initiative of a handful of Indian journalists spread around the world. We have taken the small step forward with the pledge to provide news with accuracy, free from political and commercial influence. Our aim is to keep you, our readers, informed about developments at ‘home’ and across the world that affect you.
Please help us to keep our journalism independent and free.
In these difficult times, to run a news website requires finances. While every contribution, big or small, will makes a difference, we request our readers to put us in touch with advertisers worldwide. It will be a great help.
For more information: pravasisamwad00@gmail.com