Indian govt to buy 1,650 tonnes of onions from traders for export to Bangladesh

Indian government’s export agency National Cooperative Export Ltd (NCEL) will buy 1,650 tonnes of onions at ₹29/kg from private traders for exports to Bangladesh, said industry people, The Economic Times reports.

This will be the first official export of the key kitchen staple from India in more than three months since the country banned its export from December 8 to March 31. In March first week, the Centre allowed export of 64,400 tonnes of onions to countries from which it had received requests through diplomatic channels, government officials said at the time, according to the report.

India's ban on onion exports aimed at tempering rising domestic prices had triggered a crash in domestic prices. It also led to a sharp increase in international prices as non-availability of Indian onions led to a global shortage. Demand from India's traditional buyers like Bangladesh, the Middle East and some countries from Southeast Asia is at its peak during the ongoing Ramadan season, The Economic Times further reports.

Onion exporters had recently written to the Centre claiming that huge quantities of onions - more than 50 per cent of trade during normal times - were smuggled out of the country since the export ban, according to the report.

Currently, onion prices in the wholesale markets of Maharashtra's Nashik district are ruling between ₹7/kg to ₹16/kg. Prices may soften further with the steady arrival of fresh rabi harvest, the report states.

The price which NCEL will charge onion buyers in Bangladesh could not be ascertained. Industry insiders say the export agency is expected to make considerable profits as onions are currently selling at ₹80-90/kg in Bangladesh, according to the report.

"Farmers and private trade could not benefit from the high international prices," a Nashik-based industry veteran, requesting not to be named, was quoted as saying.

"India has an upper hand in the global market from January to March. The global shortages of onions will end from May as the new crop from Egypt and Turkey will begin," Ajit Shah, president, Horticulture Export Promotion Council (HEPA), was quoted as saying.