Onion Trade with Bangladesh Back on Track

Exporters and farmers in Nashik, India's key onion-producing region, are relieved as onion exports to Bangladesh have resumed. The export via road had been halted due to political unrest in Bangladesh. Which led to border closures and disruptions in trade. Trucks carrying onions, previously stranded at the border, have now started gaining entry, temporarily easing export delays. Exporters who faced delays due to the closure of Bangladeshi banks. They are now seeing a smooth resumption of agricultural exports with the banking system back in operation.

Low Export Volumes Mitigate Market Impact

According to traders, the impact on onion exports to Bangladesh was minimal, except for the initial few days of the disruption. Now that the borders have reopened, onions and other vegetables are moving through without significant issues. The low export volumes during the disruption meant that the market and prices were not substantially affected. About 70 to 80 trucks carrying onions were stranded due to the border closure, prompting traders to temporarily halt new shipments. Bangladesh, a major buyer of Indian onions, typically imports these along with other agricultural products like grapes and tomatoes.

Government Lifts Export Prohibition, Prices Remain Strong

On Thursday, the Ministry of Consumer Affairs, Food, and Public Distribution informed the Lok Sabha that the government had lifted the onion export prohibition on May 4, 2024, allowing exports with a minimum export price (MEP) of $0,55 per kg and an export duty of 40 percent. By July 31, 2024, India had exported 0.26 million tonnes of onions for the current financial year 2024-25. The government also procured 0.468 million tonnes of onions, mainly from Maharashtra, through National Co-operative Consumers' Federation of India Ltd. (NCCF) and National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED), for the price stabilization buffer.

Compared to last year, onion farmers have seen significantly higher price realizations.

• The average monthly mandi modal prices of onions in Maharashtra between April and July 2024 ranged from $0,15 to $0,31 per kg, compared to $0,08 to $0,15 per kg during the same period last year.
• The average procurement price of onions for the buffer this year was $0,34 per kg, 64 percent higher than last year's procurement price of $0,21 per kg.
• India remains a net exporter of onions, generating significant revenue from exports.
• The net export value earned by India in the past three years was $400.44 million in 2021-22, $544.83 million in 2022-23, and $422.79 million in 2023-24.

The resumption of onion exports to Bangladesh has brought relief to farmers and exporters in Nashik, with minimal impact on the market. Government policies, including lifting the export prohibition and stabilizing prices, have helped maintain strong price realizations for onion farmers. India's position as a major exporter of onions continues to contribute significantly to the country's agricultural revenue.