India's indefinite ban on onion exports
India has imposed an indefinite ban on onion exports to control onion prices in the domestic market.
The authorities of the country made this announcement on Friday (March 23) afternoon.
The move by the Indian authorities ahead of the upcoming general elections will further increase the high prices of onions in foreign markets, Reuters reports because India is the world's largest onion exporter. The ban on onions imposed by the country in December was supposed to expire on March 31.
Traders had hoped the ban would be lifted in March because, since the ban on exports, the price of onion in the local market of India has decreased by more than half. Besides, fresh supply of current season crops has also started.
The order issued on Friday afternoon said the ban on onions will remain in force until further notice.
An executive of a Mumbai-based exporting firm said on condition of anonymity that the extension of the moratorium is surprising and totally unnecessary, considering the fall in prices with increasing supply of the new season crop.
Maharashtra is the largest onion producing state in India. There has been a huge fall in onion prices in some wholesale markets there. The executive said that the price of onion per hundred kg was Rs 4,500 in December. It has now reduced to Rs 1,200.
Prime Minister Narendra Modi is seeking a record third consecutive term in the upcoming elections. Therefore, the business community believes that he has taken such steps to keep the people satisfied.
Countries like Bangladesh, Malaysia, Nepal and the United Arab Emirates are dependent on India to meet the shortage of onion supply. Countries have been grappling with high prices ever since the ban on onion exports.
An executive of another Mumbai-based export company said that India's move has given rival exporters the opportunity to raise prices much higher. Because, they know that buyers have no choice.
According to traders, India exports more than half of onion imports to Asian countries. The country delivers shipments in less time than rival countries like China or Egypt.
India exported a record 25 lakh metric tonnes of onions in the fiscal year on March 31 last year.