The Indian government has imposed 40 per cent duty on onion exports till December 31 this year. This duty comes into effect immediately, read an Indian finance ministry notification on Saturday.
The move comes as onion prices continue to rise in that country throughout this August, and media reports say onion prices are likely to keep rising in September, reports NDTV.
Imposing this duty is likely to create an adverse impact on Bangladesh’s domestic markets as the country largely depends on Indian onions to meet its demand for the essential kitchen ingredient, say industry insiders.
Traders in different markets of Dhaka were selling the local variety of onions for Tk 80 – Tk 85 a kg, and the imported ones for Tk 55 – Tk 60 a kg on Saturday, show data from the Trading Corporation of Bangladesh.
In its bulletin on Thursday, the Reserve Bank of India (RBI) said tomato prices, on an average, also registered a further increase in August so far, although more recent data indicate some pullback in rates.
Onion and potato prices also registered sequential increases, the bulletin said.
On August 11, the central government started releasing onions from its buffer stock, news agency ANI reported.
The Indian government has decided it will maintain 3 lakh tonnes of onions in the 2023-24 season as buffer stock. In 2022-23, the government maintained 2.51 lakh tonnes of onion as buffer stock.
Buffer stock is maintained to meet any exigencies and for price stabilisation, if rates go up significantly during the lean supply season.
Rohit Kumar Singh, Indian secretary of Food and Public Distribution Department, in a meeting on Thursday with the managing directors of the government's agricultural marketing agencies – National Agricultural Cooperative Marketing Federation of India (NAFED) and National Cooperative Consumers' Federation of India Limited (NCCF) – finalised the modalities for disposal.
"It was decided to release the onion stocks by targeting key markets in states or regions where retail prices are ruling above the all-India average and also where the rates of increase in prices over the previous month and year are above the threshold level. Disposal through e-auction and retail sales on e-commerce platforms are also being explored," read a food ministry statement on Friday.
Robi onion harvested during April-June accounts for 65 per cent of India's onion production and meets the consumer's demand till the Kharif crop is harvested in October-November.
The procured stocks are usually released through targeted open market sales and also to states and Union Territories and government agencies for supplies through retail outlets during the lean supply season.
