December 29, 2020 | Investopaper
India has lifted a ban on onion exports after nearly four months. The Ministry of Commerce and Industry of India has decided to open the export by amending the previous policy from Monday. Export of onions of all varieties will open from January 1, 2020. India had banned the export of onions from on September 14 (Bhadra 29, 2077 BS) as prices were skyrocketing due to declining domestic production.
More than 90 percent of the onions consumed in Nepal are imported from India. Nepal has been importing more than Rs 3 billion worth of onions annually from India alone. For the same reason, the decision by India to ban exports had pushed up the price of onion in Nepal as well.
In India, there is a shortage of onions in Bhadra to Ashwin every year. The imbalance between supply and demand of onions continues till the end of Karthik. After that, with the arrival of new crop, the supply of onion eases and the market price of onion declines. The price of onion goes up to Rs 150 in India due to shortage of supply. In India, the states of Maharashtra and Karnataka are known for onion production. Fluctuations in onion production in these two states affect markets across India.
India is the third largest onion exporter in the world after the Netherlands and China. Fluctuations in onion prices in India and imbalances between supply and demand affects the entire international market.