Ban on onion export imposes stock limits on traders

Onion export to Bangladesh and Sri Lanka urgently stops states from prosecuting collectors

(PTI) New Delhi, Ta. September 29, 2019, Sunday

Concerned over rising onion prices in the country, the central government has on Sunday banned the export of onions, which are considered to be poor people, and imposed stock limits on traders. The central government has taken this decision to increase the availability of onions at the grassroots level and provide relief to the citizens for the daily consumption of their kitchens.

Retailers will only be able to store up to 100 quintals of storage while the wholesale retailers have been allowed to store 500 quintals, the Consumer Affairs Ministry said.

He added that state governments have been directed to take drastic measures to prevent onion collection. The ministry said that exports to Bangladesh and Sri Lanka have been stopped at a lower price than the minimum export price (MEP) and that action will be taken against those who violate these rules.

Onion retail prices have been witnessing a sharp rise since August, after the government's efforts to increase the supply of onions and reduce prices in the markets failed. Retail prices of onion in New Delhi and parts of the country, which are currently losing onion supply due to floods in Maharashtra and Karnataka, the leading states of onion, are priced at Rs. 60 to 80.

With the onion prices high in the market, the central government on Sunday took some steps to reduce prices, including imposing stock limits on traders and urging state governments to take stringent action against collectors, the Consumer Affairs Ministry said.

Onion export has been banned from immediate effect unless the government gives further orders to increase availability at the local level, the ministry said.

According to the government notification, the Directorate General of Foreign Trade (DGFT), the unit of the Ministry of Commerce, has been banned from immediate effect on the export of onions of every kind.

The DGFT had set a minimum export price (MEP) of US $ 850 per tonne to prevent onion prices from rising. Exporters cannot export onions at lower prices than MEPs. The decision was aimed at increasing the availability of onions at a local level.

States have the right to set stock limits. But this time the central government has imposed stock limits directly on the states. The Center directed states to strictly enforce the onion storage limit and take action against collectors. Despite the central government's restrictions, state governments have been allowed to increase or decrease stock limits.