India's onion export ban spooks Asian markets
03 October 2019
Onion prices across Asian markets turned volatile after India, the largest producer and exporter of the kitchen staple banned exports after domestic prices started spiralling. India banned onion exports after an extended monsoon delayed harvests.
Since India banned export of onions, countries such as Bangladesh, Sri Lanka and Nepal have turned to the producers like Myanmar, Egypt, Turkey and China to increase supplies in a bid to bring down prices.
Onion prices have more than doubled in the last month alone, badly hurting consumers in Pakistani, Bangladeshi, Nepal and Sri Lanka besides India.
India’s neighbouring countries are dependent on India for onion supplies because of easier shipments and market accessibility compared to other exporters such as China and Egypt. But, with India hiking export price and banning exports in the wake of the price spike in the local markets, these countries have started looking elsewhere for onion supplies.
Wholesale prices of onion in India zoomed past Rs4,500 per quintal as supplies dried up following a long rainy spell that delayed harvesting.
India exported 2.2 million tonnes of fresh onions in the 2018-19 fiscal year ended March 31, according to data from India's Agricultural and Processed Food Products Export Development Authority. That's more than half of all imports by Asian countries, traders estimate.
Although countries have turned to other producers like Myanmar, Egypt, Turkey and China, supplies from India are hard to replace and importers and consumers are grappling with the problem of buying costly onions from elsewhere.
The Bangladesh government had initiated subsidised sales of onion through the state-run Trading Corporation of Bangladesh (TCB).to tackle the crisis, but traders said "Other exporting countries are taking advantage of the Indian ban" to raise their asking price.
While Sri Lanka has placed orders with Egypt and China, importers and traders there say prices have risen by 50 per cent in a week, to 280-300 Sri Lankan rupees ($1.7) per kilogramme.
Malaysia, the second-biggest buyer of Indian onions, expects the Indian export ban to be temporary. But, with India also importing onions from Egypt in an effort to calm prices, supplies from India cannot be expected to normalise in the near future