Why govt bans onion exports? Check dramatic rise in onion prices, exports during pandemic

Why govt bans onion exports? Check dramatic rise in onion prices, exports during pandemic

Onion is one of the major ingredients of the Indian food platter, and thus the rise in prices affects almost all the sections of society.

Onion prices, which remained benign until August, witnessed a sudden surge in the month of September, forcing the government to immediately ban the exports of all varieties of onions. Onion price was Rs 20-22 per kg during June-August, but it dramatically rose to Rs 30 per kg, as on September 10, according to the Price Monitoring Division of the Department of Consumer Affairs. Onion is one of the major ingredients of the Indian food platter, and thus the rise in prices affects almost all the sections of society. While the onion prices shot up in the month, the prices for potato and tomato also rose from Rs 33 per kg and Rs 54 per kg to Rs 37 per kg and Rs 60 per kg on-month, as on September 10.

As India stepped forward to become a kitchen for the world, the exports of agricultural commodities from March to June 2020 skyrocketed by 23.24 per cent on-year to Rs 25,552.7 crores, according to the Ministry of Agriculture & Farmers Welfare. The government had said that self-reliant agriculture is critical for the goal of an Atmanirbhar Bharat; and for this, agricultural export is extremely important as besides earning foreign exchange for the country, the exports help farmers, producers, and exporters to take advantage of a wider international market and increase their income.

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The exports of onions and shallots also jumped amid the lockdown months of April-June. Onions and shallots worth Rs 2,340 crore were exported in the previous full fiscal year FY 2019-20. However, in just one quarter (Q1) of the current fiscal 2020-21, onions and shallots worth Rs 1,203 crore were exported from India, according to the Department of Commerce. It is to be noted that there was a fall of 33.5 per cent on-year in the exports of onion and shallots in the last fiscal.

Meanwhile, India had last year banned the exports of the key kitchen staple due to a rise in prices and set the minimum export price (MEP) of onion at $850 a tonne to curb its shipments. However, the MEP was lifted in March this year, and onions were made free for export.

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