India lifts onion export ban, slaps 40pc duty

Local market unlikely to be cool

FE REPORT | Published: May 04, 2024 23:08:55

The neighbouring India has withdrawn its ban on onion export to certain countries, including Bangladesh, but slapped a 40-per cent export duty on the product.
The removal of the ban is, therefore, unlikely to help tame the price of the kitchen item in Bangladesh amid existing higher duties, according to insiders.
"The government of India on Friday imposed a 40-per cent duty on export of onions. In a notification, the finance ministry said the changes would be effective from May 04," reported The Economic Times (ET) of India on Saturday.
The report said onion export was currently banned.
"However, the government allows shipments to India's friendly nations. It has permitted a specified quantity of onion exports to the UAE and Bangladesh."
The Bangladesh government in March requested the Indian government to permit 50,000 tonnes of onion export.
Later in the first week of April, India sold 1,200 tonnes to Bangladesh under the G2G agreement. Bangladesh sold onion through its open market sales at a subsidised rate.
The price of onion increased by 30 to 40 per cent in a month during its peak harvest season in the country. Local onion now retails at Tk 70-75 a kg, according to sources at kitchen markets and groceries.
Meanwhile, an official at the Plant Quarantine Wing said traders have got permits to import 2.3-million tonnes of onion in the last one year, but they brought only 0.7-million tonnes.
Import from India through private channels has remained stopped for the last four months amid an export ban slapped by India, he added. Imports from other countries like China, Turkey, Myanmar or Egypt have also remained halted for the last one month.
Anwar Hossain, a Dinajpur-based trader, said average onion price in the Indian wholesale markets is now 20-30 rupee (Tk 27-40 a kg) based on quality.
"We are still not clear whether the private sector would be allowed to import or not."
Mr Hossain said import cost through the private sector would be a minimum of Tk 42 a kg and a maximum of Tk 60 for now if the current price in India persisted.
The import cost would be too high to cool down prices amid the 40-per cent duty, he added. However, agriculture ministry is expecting a record 3.6-million tonnes of onion production this fiscal year against a demand for the highest 3.0-million tonnes.
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