The Indian government has made a significant decision to permit the export of onions to six neighbouring countries, including the UAE and Bhutan, despite the earlier ban on such shipments. This move comes after a period of restriction imposed on onion exports due to domestic supply concerns.
Details of the Export Allowance
Under the recent decision, the government has allowed the export of 99,150 tonnes of onions to six neighbouring countries, including Bangladesh, UAE, Bhutan, Bahrain, Mauritius, and Sri Lanka. Additionally, exports of 2,000 tonnes of white onions, specifically cultivated for export markets in the Middle East and Europe, have also been permitted.
Background of the Export Ban
The ban on onion exports was initially imposed by the Indian government on December 8, 2023, to address concerns regarding adequate domestic supply. This measure was taken in response to lower Kharif and Rabi crops estimates for the year 2023-24 compared to previous years. The National Cooperative Exports Limited (NCEL) has been designated as the agency responsible for exporting onions to the designated countries. These onions are sourced through e-platforms at negotiated rates and supplied to the destination countries’ agencies on a 100% advance payment basis.
Impact on Maharashtra
As the largest producer of onions in India, Maharashtra plays a crucial role in the export process. The onions sourced by NCEL for export predominantly come from Maharashtra, highlighting the state’s significance in the onion trade.
Analyst Reactions
Industry analysts anticipate a potential decline in Mahindra Finance’s profit before tax due to the fraud incident. Regulatory noncompliance and fraud allegations may affect investor confidence in the company, influencing its market valuation and future prospects.
Strategies to Ensure Onion Supply Stability
To address concerns regarding onion supply stability, the government has set a procurement target for onion buffer out of Rabi crop 2024. Central agencies are collaborating with local entities to support procurement, storage, and farmer registration, aiming to maintain adequate onion reserves and stabilize market prices.
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