Govt to lift ban on onion exports as prices likely to fall sharply

The government on Wednesday decided to lift the nearly six-month-old ban on export of onions in a bid to protect the interests of farmers as prices are likely to fall sharply due to bumper rabi crop.

Sources said the decision was taken at a meeting of a Group of Ministers (GoM) headed by Home Minister Amit Shah.

"Since the price of onion has stabilised and there is bumper onion crop, government has decided to lift ban on export of onions. Expected monthly harvest in March is over 40 lakh MT compared to 28.4 lakh MT last year," Food Minister Ram Vilas Paswan said in a tweet on Wednesday.

The lifting of ban would be effective once the Directorate General of Foreign Trade (DGFT) issues a notification in this regard.

The GoM on Wednesday also deliberated on whether to reduce or scrap the Minimum Export Price (MEP) on onion to facilitate outbound shipments, the sources said.

The MEP is the rate below which no exports are allowed.

Paswan, Agriculture Minister Narendra Singh Tomar, Commerce Minister Piyush Goyal and Cabinet Secretary Rajiv Gauba were present at the meeting.

In September 2019, the government banned onion exports and also imposed a MEP of USD 850 per tonne. The move came after prices had started skyrocketing due to supply-demand mismatch.

There was shortage of onion as kharif crop was adversely affected due to excess rains and floods in key producing states, including Maharasthra.

Currently, the arrival of rabi (winter) crop of onion has begun in small quantities and would increase from mid-March onwards.

In March alone, onion arrivals are expected to be as as high as 40.68 lakh tonne (Metric Tonne) when compared with 28.44 lakh tonne in the year-ago period, as per the sources.

The arrival is anticipated to be higher at 86 lakh tonne in April compared to 61 lakh tonne in the year-ago, they added.

Exports of onion are expected to arrest sharp the fall in domestic prices and thereby protect the interest of growers, the sources said.

During the meeting, the sources said import of pulses, especially urad, was also discussed.