Asian importers of Indian onions are struggling to secure supplies after New Delhi decided to make its exports costlier in order to rein in prices in its own market, Reuters reported on Friday.
Onions sold overseas by Indian traders must not be cheaper than $850 (approximately Rs 54,826) per tonne till the end of the year, the government had said last week. This is making it difficult for traders in Bangladesh and Malaysia to buy the kitchen staple, which they used to buy from India for just around $185 (Rs 11,932) a tonne in July.
“At the moment, there is nothing we can do but to wait,” Dhaka trader Mohammad Idris told Reuters. “We are hoping the price of onions will come down in India once their new harvest hits the markets.” Onion prices in Bangladesh have risen three times in just a few months, and were at an all-time high of 100 taka (Rs 78) per kg this week.
India is the world’s largest exporter of onions. However, record production last year led farmers to grow less onions this year to avoid losses, which has now pushed prices up. Earlier this week, retail prices in Delhi touched Rs 80 a kg.
When lack of supplies increases prices, the government imposes limits like the minimum export price, to discourage overseas traders from buying the commodity and allow more supplies to remain within the country.
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