Nepal faces shortage after India slaps 40% tax on onion exports: Report

The new tariff has severely affected Nepal as several traders in Kalimati Fruit and Vegetable Market reported a sudden scarcity of onions

Nepal has started to face an acute shortage of onions, days after neighbouring India slapped a 40 per cent export tax on the vegetable, a media report said on Wednesday.

India last week imposed a 40 per cent tariff on the export of onions till December 31 to restrict overseas sales. The move comes amid anticipation of a price rise ahead of the festival season when demand for most commodities goes up, The Kathmandu Post newspaper reported.

The new tariff has severely affected Nepal as several traders in Kalimati Fruit and Vegetable Market -- the Himalayan nation's largest wholesale market for agricultural products-- reported a sudden scarcity of onions.

There is a severe scarcity of onions in the Nepalese markets now. No onion shipments have been delivered since Sunday, and the remaining stocks were sold out by Monday, Binay Shrestha, Information Officer for the country's largest produce bazaar, was quoted as saying in the report.

Shrestha said that onions cost Rs 54 per kg two weeks ago but now the retail price of onion has crossed Rs 100 per kg in Kathmandu Valley.

As Nepal imports almost all its onion requirements from India, the export duty has created shortages in the domestic market.

Traders said that the scarcity coincides with the start of Nepal's festive season when onion consumption explodes.

The festival season is marked by endless feasting, and the spicy bulb is indispensable to local cooking.

The price may rise further. We cannot say how much, said Shrestha.

There were no deliveries during the weekend, which is Saturday and Sunday in India. New shipments will arrive with 40 per cent tax added to the cost, he said.

Mohan Baniya, president of the Potato-Onion Import-Export and Wholesaler Association, said that after the new Indian tax went into effect, the wholesale price of onion soared to Rs 78 per kg at the Kalimati market on Monday.