The Indian government has lifted the onion export ban to help protect the interests of farmers, with the March harvest estimated to be over 40% higher than the previous year at 40m tonnes.
The government had imposed the ban in September last year, when the price had rocketed due to kharif crops being adversely affected by rains and floods. To keep a lid on prices, the government had also imposed stock limits and imported onions from Egypt, Afghanistan and Turkey.
The introduction of the ban led to Indian onion prices falling by 20.2% since the start of November 2019 and are currently 72% lower than the highs witnessed in December 19. Indian onion prices are expected to continue to decline, with a favourable climate in India providing an abundant rabi crop. Data collected by the agriculture ministry revealed that the sowing of the rabi crop is 6.4% more than last year. In addition, Bangladesh a significant importer of Indian onions is expected to minimise its reliance on India for the good, following the sudden export ban and aims to become more self-sufficient and diversify their sources of supply. The lifting of the export ban is expected to slow down the downward trajectory in a currently bearish Indian onion market.