India's imposition of $800 per tonne floor price for onion increases domestic market worries

Bangladesh's onion market is set for another hit after India on Saturday (28 October) imposed a minimum export price (MEP) of $800 a tonne on onion exports between 29 October and 31 December to ensure domestic availability.

The move was likely prompted by the rising onion prices in the country owing to a delay in the arrival of kharif onions  – which, along with late kharif crops, contribute 40% of India's onion produce, Mint reports.

Onion prices have shot up more than 50% in the past two weeks to ₹80 a kg in the retail markets of Delhi, the Mint report added.

In Bangladesh, onions continue to be a sore point.

Earlier, Bangladesh bought onions at around $300 per tonne. 

But then the local onion market was hit by the hefty 40% export duty imposed by India, a major supplier of the essential kitchen ingredient to Bangladesh, back on 19 August, which was set to stay till 31 December.  

The wholesale price shot up by Tk70-120 per 5kg in a span of just one day soon after India's announcement. 

In discussions with traders and market monitors, it was known that the government maintained the import of onions.

However, the imported onions are now being sold at Tk80, a significant increase from the previous price range of Tk55-65 just a month ago.

According to the Department of Agricultural Extension (DAE), onion production in the country has crossed 35 lakh tonnes. 

At least 25% is accounted for as post-harvest loss in onion stocks. Sometimes, this loss is even greater. 

The agriculture ministry says that the demand for onions is around 28 lakh tonnes.

However, onion traders, including importers, say that the production of onions in the country is less than what the government is showing.