Asif Iqbal Thakor from New Delhi: The new Indian onion policy has badly affected Bangladesh, Sri Lanka and UAE due to the sudden price hike and impose ban on exports. During last three years India has been facing shortage of onion due to the poor production and impose ban on exports, which is now established as the ‘Onion Diplomacy’ of India to its neighbours including Bangladesh, Nepal and Bhutan.
India on Monday prohibited the export of all varieties of onion except those cut, sliced or in powder form. “The export of all varieties of onion…is prohibited with immediate effect,” the Directorate General of Foreign Trade (DGFT) said in a notification. The ban includes Bangalore rose onions and Krishnapuram onions.
“Rates have increased and there is shortage of onion in the domestic market. While this shortage is seasonal, a huge quantity of exports were done during last few months for the Covid-19 pandemic,” said an official aware of the development.
India exported $198 million of onions in the April-June period of FY21 and $440 million in the entire 2019-20.
Bangladesh, Malaysia, UAE and Sri Lanka are the top importers of Indian onions.
India had last year banned the exports of the key kitchen staple in the wake of its rising prices in the country and set the minimum export price (MEP) of onion at $850 a tonne to curb its shipments and help bring down soaring prices in the domestic market due to floods in parts of major growing states of Maharashtra and Karnataka. The MEP was lifted in March this year and onions were made free for export.
With wholesale prices of onion at Maharashtra’s Lasalgaon market crossing Rs 30/kg on Monday, the central government banned all export of the bulb “with immediate effect”.
This comes even as the government is set bringing laws in Parliament to remove all stockholding and movement restrictions on farm produce.
Prices at Lasalgaon’s market in Nashik district started rising since early May. The recent appreciation of prices is mainly due to heavy August rain destroying the onion crop of north Karnataka, which was supposed to hit the market early September.
Suresh Deshmukh, a commission agent operating out of Dindori’s wholesale market in Nashik district, also said that the rain caused extensive damage to stored onions in Madhya Pradesh and Gujarat. “Thus, at present it is only Maharashtra which has stored market-ready onion and the supply crunch is set to continue until the new crop hits the market in November,” he said.
Our Correspondent adds from Dhaka: The initial price hike started on July, one month before Eid-ul-Azha. From July 2 to October 31, the onion price fluctuated 24 times.
On September 14, India prohibited exports of onions in the wake of its rising prices in the country. India’s commerce and industry ministry amended the export policy of onion from free to be prohibited. (India had exported fresh and chilled onions worth USD 496.82 million in 2018-19).
On September 13, the TCB began selling onions in open market sales (OMS) at Tk 30 per kg.
Later, the authorities launched a drive to keep the prices under control. The commerce ministry also announced that a large shipment of onions would come, and yet, nothing could prevent the hike of onion prices. Traders and importers said prices increased because of supply shortages. But as per Bangladesh Bank (BB) data, Bangladesh imported 10.07 lakh tonnes of onion in the 2018-19 fiscal years, mostly from India, while the country needed to import only three lakh tonnes to meet its local demands. The Bangladesh Tariff Commission and the commerce ministry said the country required 26 lakh tonnes of onions annually, while the Department of Agriculture Extension (DAE) said the country produced 23 lakh tonnes. This meant that 88.46 per cent of the demand for onions could be met with local production and the remaining 11.54 per cent through imports.
Meanwhile, the Conscious Consumer Society (CCS), a consumer rights organisation, levelled the allegation that a syndicate of traders has pocketed around Tk 3,180 crore in the last year by manipulating the onion market and its prices.
The government later imported onions from Pakistan, Egypt and China, but the price of imported onions remained high, ranging between Tk 180 and Tk 230 a kg, depending on quality.
Consumer Association of Bangladesh (CAB) president Golam Rahman said the prices of commodities have risen because of increasing export growth. “The government should fix the export rate of commodities,” he said. “A group of unscrupulous traders take advantage of higher demand and then hike prices accordingly. The government should take strict action against those syndicates,” he added.
Palash Mahmud, the executive director of Conscious Consumer Society (CCS), told that the government should make a vigorous attempt to control the kitchen market prices for the sake of the consumers. He said the authorities have set a fixed rate for the essential cooking ingredient to impart stability to the market and ensure the prices do not increase any further.
“It is true that here in Bangladesh, the monthly income of a consumer does not increase at the same pace at which the prices of essential commodities increase every day. It exerts a big pressure on him. It’s tough for him to maintain his family properly,” said Mahmud.
He mentioned that the government itself has acknowledged that there is a syndicate behind the price hike. This syndicate should be booked under the law speedily, he iterated. “I think the government will set the prices of essential commodities within a certain range in the coming year and properly regulate the market,” he added.
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