Government’s Decision to Allow Export
The Indian government has taken a significant step by permitting the export of an additional 10,000 tonnes of onions to the UAE through the National Cooperative Exports Ltd (NCEL). Thus supplementing the 14,400 tonnes already authorized on March 1. This move comes in the wake of the approval of 79,150 tonnes of onions for export since the imposition of the shipment ban on December 8, 2023.
Justification for Export Ban
During the fiscal year 2023-24, the government enforced an export ban on onions, citing global supply constraints exacerbated by the dry spell associated with El Niño. This adversely affected onion production in India. Prior to the ban, measures such as a 40% export duty and the introduction of a minimum export price (MEP) were implemented to stabilise domestic availability.
Authorization has been granted for the export of specified quantities of onions to Bhutan, Bahrain, Mauritius, Bangladesh, and the UAE. However, the timeline for these exports needs to be clearer, especially considering the lack of specific provisions in the latest notification.
Government’s Intervention and Farmer Support
In a bid to mitigate the impact of the export ban, the government announced its intent to directly purchase 0.5 million tonnes of onions from farmers, offering support during these challenging times.
Rabi onion production is expected to decline by 18% to 19.3 million tonnes in the 2023-24 period compared to the previous year’s output of 23.6 million tonnes. Rabi onions, contributing 72-75% of the country’s annual production, play a critical role in ensuring year-round availability because of their superior shelf-life and storage capabilities.
In conclusion, the government’s decision to permit the export of an extra 10,000 tonnes of onions to the UAE, supplementing the previously authorised 14,400 tonnes, signifies a strategic move. This decision aligns with the approval of 79,150 tonnes for export since the imposition of the shipment ban. While measures like export duty and minimum export price aimed to stabilise domestic availability, clarity is needed regarding the timeline for exports to Bhutan, Bahrain, Mauritius, Bangladesh, and the UAE. The government’s intervention in direct purchase from farmers aims to support them amid declining production, highlighting the significance of strategic agricultural policies.
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