Election Commission nod taken before lifting ban on onion exports: Govt sources

The decision to lift the ban on exports of onion was on the recommendation of the Department of Consumer Affairs, which monitors the availability and price situation of onion in the country. File | Photo Credit: PTI

The Centre has taken permission from the Election Commission of India to lift the onion export ban as the Model Code of Conduct is in effect due to the Lok Sabha elections, sources said.

The government lifted the ban on onion exports, a decision that can help boost farmers’ incomes ahead of the Lok Sabha polls in key producing regions, including Maharashtra.

The government has imposed a minimum export price (MEP) of $550 per tonne (around ₹46 per kg) and 40% export duty. Taking duty into account, the shipments will not be allowed below $770 per tonne (around Rs 64 per kg).

The decision to lift the ban on exports of onion was on the recommendation of the Department of Consumer Affairs, which monitors the availability and price situation of onion in the country.

According to government sources, the Department of Revenue under the Finance Ministry took permission from the ECI to lift the ban on onion exports.

The decision assumes importance as it comes before the crucial Lok Sabha polls in key onion belts like Nashik, Ahmednagar and Solapur in Maharashtra. Farmers of this region have been demanding a lifting of the ban so that they can get a better price for their produce.

Impact on prices

On December 8 last year, the Centre had banned onion exports in early December to control retail prices amid concerns over likely fall in production. During the last 4-5 years, the country annually exported between 17 lakh and 25 lakh tonnes of onions.

Consumer Affairs Secretary Nidhi Khare on May 4 said the lifting of the ban would not lead to any price rise in retail markets. “Prices will remain stable. If at all there is any increase, it should be very marginal,” she said, while asserting that the government is committed to protect the interests of both consumers and farmers.

The Directorate General of Foreign Trade (DGFT) in a notification on May 4, said that “the export policy of onions is amended from prohibited to free subject to MEP of USD 550 per metric tonne with immediate effect and until further orders.” On May 3, the Finance Ministry imposed a 40 per cent export duty.

Explaining the rationale behind the decision, Ms. Khare said the “ban on onion exports has been removed from today (Saturday) because the supply situation is comfortable and prices are stable in both mandies as well as retail markets.” The modal price at Lasalgaon mandi in Nashik was Rs 15 per kg in April.

She said the decision has been taken after considering the latest estimates of onion production in rabi season at 191 lakh tonnes, which is comfortable. Availability and prices of onion in global markets were also factored in while taking this decision.

The Secretary said the monthly domestic demand for onion is around 17 lakh tonnes. “Lifting the ban would also encourage the farmers to put more area under onions. The monsoon forecast is above normal,” she said.

She noted that the decision was taken after wider discussions with stakeholders. A high-level team also visited key onion-producing belts in Maharashtra to assess the ground situation.

Miss. Khare also pointed out that the shelf life of onions is less and therefore a need was felt to export onions. She said that the government is procuring 5 lakh tonnes of onions as buffer stock, and it can intervene in the market in case of price rise.

“We are continuously monitoring the prices of all essential food items. We will continue to keep a watch on the availability and price situation,” she said.

A senior government official explained that there is an inter-ministerial committee (IMC) which reviews the prices, production, availability and exports of essential food items, including onions. “So do not think of this as an isolated instance of decision making by IMC,” the official said, when asked whether the decision has been made in view of general elections.

The official said the IMC has been taking a series of steps in various commodities including wheat and rice to boost domestic supply and keep prices under check.

In March, the Union Agriculture Ministry released the data for onion production. As per the data, onion production in 2023-24 (First Advance Estimates) is expected to be around 254.73 lakh tonnes compared to around 302.08 lakh tonnes last year. This is due to a decrease of 34.31 lakh tonnes output in Maharashtra, 9.95 lakh tonnes in Karnataka, 3.54 lakh tonnes in Andhra Pradesh and 3.12 lakh tonnes in Rajasthan, the data showed.

Last month, in an official statement, the Ministry of Consumer Affairs, Food and Public Distribution said the government has allowed export of 99,150 tonnes of onion to six neighbouring countries of Bangladesh, UAE, Bhutan, Bahrain, Mauritius and Sri Lanka.

The Congress last month accused the Narendra Modi government of “callously neglecting” Maharashtra’s onion farmers affected because of the ban on onion exports. In its manifesto, the party promised a predictable import-export policy to prevent such catastrophic last-minute policies being imposed on farmers.