Improved export performance and price realization for farmers following the removal of export restrictions
India’s onion export landscape has seen significant shifts following the government’s decision to lift the export ban on May 4, 2024. The ban, initially imposed to stabilize domestic prices, was lifted under new conditions that included a minimum export price (MEP) of USD 550 per ton and an export duty of 40%. As a result, India exported 260,000 tons of onions by July 31, 2024, according to a statement by B L Verma, Minister of State for Food and Consumer Affairs.
This export figure reflects a cautious yet positive rebound in the onion trade, particularly when compared to the total exports of 1.6 million tons recorded in the previous fiscal year. The reintroduction of Indian onions into the global market has been carefully managed to prevent domestic price spikes, which were a major concern leading to the initial export restrictions.
In addition to the export regulations, the Indian government undertook substantial procurement efforts to stabilize onion prices within the country. A total of 468,000 tons of onions were purchased, primarily from Maharashtra, the nation’s leading onion-producing state, through the National Cooperative Consumers’ Federation (NCCF) and the National Agricultural Cooperative Marketing Federation (NAFED). These efforts have been instrumental in controlling market volatility and ensuring fair prices for consumers and farmers alike.
For onion farmers, the post-ban period has been marked by improved price realization. The average monthly mandi modal prices in Maharashtra, a key indicator of market trends, have ranged between Rs 1,230 and 2,578 per 100 kg in 2024, a noticeable increase from the previous year’s figures. Additionally, the average procurement price for onions under the price stabilization buffer program has risen to Rs 2,833 per 100 kg, representing a 64% increase compared to the prior year. This increase underscores the government’s efforts to support farmers through better price mechanisms amid fluctuating market conditions.
The lifting of the export ban and the associated policies have not only reactivated India’s onion exports but also contributed to a more balanced market environment. The enhanced export conditions, coupled with robust domestic procurement and price stabilization measures, suggest that India is on a path to sustaining its role as a major player in the global onion market while ensuring fair returns for its farmers.
