The prohibition imposed by India on onion exports has led to a surge in vegetable prices for Asian purchasers, prompting them to seek more affordable alternatives. The restrictions are expected to persist until the general elections next year, making it unlikely for New Delhi to lift the ban in the near term.
On December 8, the largest global exporter of onions implemented a ban on shipments as domestic prices surged by over two-fold in a span of three months, driven by a decline in production.
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Presently, retail consumers from Kathmandu to Colombo are grappling with elevated prices. This is because conventional Asian buyers, including Bangladesh, Malaysia, Nepal, and even the United Arab Emirates, depend on imports from India to fill domestic supply gaps.
“Onions are needed for almost everything we cook,” said Mousumi Akhtar, who works in the private sector in Dhaka, the capital of Bangladesh. “This sudden price hike is tough to swallow. I’ve had to cut back on how much I buy.”
Asian consumers have developed a significant reliance on Indian onion supplies to enhance the flavors of their favorite dishes, ranging from Malaysia’s belacan shrimp paste and Bangladeshi biryani to Nepal’s chicken chillies and Sri Lankan fish curry.
According to traders’ estimates, India contributes to over half of all onion imports by Asian nations. The shorter shipment times compared to rival exporters like China or Egypt play a crucial role in maintaining the freshness and flavor of this perishable commodity.
In the fiscal year ending on March 31, India achieved a record onion export of 2.5 million metric tons, with its largest buyer of the vegetable being neighboring Bangladesh, which received 671,125 tons.
To address the scarcity, Bangladesh is attempting to secure additional supplies from China, Egypt, and Turkey, as stated by Tapan Kanti Ghosh, an official from the commerce ministry.
With general elections looming next month in Bangladesh, the government has initiated the sale of onions at subsidized prices to support the less affluent, aiming to mitigate a price surge of over 50% following India’s export ban.
The situation is even more dire in landlocked Nepal, where the majority of onions are imported.
“Since the ban by India, we have monitored the supply situation at different places. There are no onions on sale,” said Tirtharaj Chiluwal, an official of the Himalayan nation’s commerce ministry.
Nepal is contemplating imports from China and is considering requesting India to make an exception and permit onion exports, according to Gajendra Kumar Thakur, a spokesperson for the ministry.
Countries relying on imports now face pricier supplies from China, Iran, Pakistan, and Turkey, all of which have increased prices due to India being absent from the market, as stated by Ajit Shah, an Indian exporter.
If India’s ban persists for an extended period, all supplies would be depleted, noted an exporter located in Mumbai, the financial capital.
Just a week following the ban, onions in India experienced a 20% price reduction as the new season’s crop supplies entered the market, according to traders.
At present, with domestic supplies surpassing the demand within the country, Shah, the exporter, suggested that India should permit exports to uphold its position in the global market.
However, the restrictions are not expected to be lifted before the general elections next year, as Prime Minister Narendra Modi’s government prioritizes controlling food prices, according to the exporter based in Mumbai.
Exports of rice, sugar, and wheat from New Delhi have also been curtailed.
Following India’s export ban, onion prices in Sri Lanka have nearly doubled, adding pressure to a country that is slowly recovering from its most severe financial crisis in nearly seven decades.
Malaysia, along with other importers, is actively seeking to procure supplies from China and Pakistan, according to Seri Mohamad Sabu, the Minister of Agriculture.