India, world’s largest onion exporter, halts export on severe weather as other sellers take advantage

The Indian government has ordered onion exporters in the country to suspend the export of the commodity to meet up with what is left in the country due to the extended monsoon rain downpours which delayed harvests and supplies.

The monsoon rain downpours dealt a heavy blow in some parts of India and that has affected the harvest of onion in the country which triggering the flow in supplies.

India, known as the world’s biggest seller of onion, with its temporary shutdown of export has led major buyers to switch to other big sellers like China, Egypt and Iran to cushion the effect of an impending global shortage.

According to government officials, while local prices in Kathmandu and Colombo has skyrocketed to ₹4,500 ($63.30) per 100 kilogrammes, the highest in nearly six years at the beginning of the week, countries such as Bangladesh have turned to the likes of Myanmar, Egypt, Turkey and China to increase supplies in a bid to bring prices down.

Also, in Sri Lanka, onion prices have risen by 50 percent within a week, to 280-300 Sri Lankan rupees ($1.7) per kilogramme.

Similarly, the rising prices have left a spiral effect on importers in Bangladesh a nightmare to source for the vegetable elsewhere, according to Mohammad Idris, a local trader in Dhaka.

“Prices are going up elsewhere in Asia and Europe, other exporting countries are taking advantage of the Indian ban to raise their asking price,” said Idris.

Also, consumers are paying $1.42 per kilogramme, twice the price of what it used to be two weeks ago, which is the highest in six years.

According to a shopper, Pokharel, who lamented of the hike in Kathmandu, expressed shock.

“This is a terrible increase, onion prices have more than doubled in the last month alone,” she said.

However, to cushion the effect of the hike, the Trading Corporation of Bangladesh (TCB) of the Bangladeshi government has initiated onion subsidy scheme which allows importers and local consumers to feel a relief of the regional crisis.

“We are looking for all possible options to import onions. Our target is to import in the shortest possible time,” said TCB spokesman Humayun Kabir.

Elsewhere, Turkey and Iran, both governments are still on the lookout if prices would come down in India.

Meanwhile, as shipments duration from Egypt takes one month, China, 25 days and while India takes just a few days, importers in Bangladesh might feel some bites of the hike before supplies normalise, said, Idris.

As this spiral effect continues, Malaysia, the second-biggest Indian onion buyer assures local importers and consumers of less panic as it hopes that prices could drop.

According to data from the Agricultural and Processed Food Products Export Development Authority (APFPEDA), India has exported about 2.2 million tonnes of fresh onions in the 2018 – 2019 fiscal year ended March 31, that is more than half of all imports by Asian countries.