Onion Exports Prohibited “Till Further Orders”

·      Ban has only Salutary effect since Export Variety is Very Different Compared to Domestic Variety

·      No Order on Goods in Transit and LC backed Pending Contracts

As per the latest directive, wholesale traders can stock up to 500 quintals, retail traders can store 100 quintals

As onion prices continue to spiral in the retail market, the Centre on Sunday, 29 September 2019 banned the export of all varieties of the bulb with immediate effect and imposed stock limits on both retail and wholsesale traders.

In a notification, the Director-General of Foreign Trade (DGFT) said the export policy of onions is amended from “free to prohibited till further orders”.

Providing relief

The Consumer Affairs Ministry, meanwhile, imposed a stock limit of up to 100 quintals on retail traders and 500 quintals on wholesale traders to improve the domestic availability of onion, hoping this will provide some relief to consumers.

The DGFT took the decision to ban exports with immediate effect following a letter from Consumer Affairs Secretary Avinash K Srivastava on Sunday, 29 September 2019.

In the letter, Srivastava said that increasing the minimum export price (MEP) of onion to $850 per tonne on September 13 had some positive impact, with exports coming down for a few days. However, exports, particularly to Sri Lanka and Bangladesh, at prices lower than $850 a tonne, are still continuing, prompting the Ministry to impose a total ban.

“The ban is expected to improve its (onion) domestic availability and cool prices,” the Ministry said.

The Ministry also urged State governments to carry out anti-hoarding operations against unscrupulous traders by organising raids.

Buffer stock offloaded

In a related move, the Centre decided to offload its buffer stock of 50,000 tonnes across the country. These stocks will be made available to consumers in Delhi, Haryana and Andhra Pradesh at regulated prices, it said. Consequently, the state-run Mother Dairy and the cooperatives Nafed and NCCF are selling onion at a cheaper rate of ₹23.90 per kg in Delhi.

The Centre had, last month, warned of strict action against hoarding onion amid supply disruption due to floods in parts of major growing States Maharashtra and Karnataka.

[Notification No. 21/2015-2020 dated 29 September 2019]

Effect of this Notification: Export of all varieties of onions, as described above, is prohibited with immediate effect.

Subject: Amendment in Export policy of Onions

S.O. (E). In exercise of powers conferred by Section 3 of the Foreign Trade (Development & Regulation) Act, 1992, as amended, read with paragraph 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020, the Central Government hereby makes the following amendment with immediate effect on the export policy of Onions for the item description at Serial Number 51& 52 of Chapter 7 of Schedule 2 of ITC (HS) classification of Export & Import Items.

"Export policy of onion for the item description at Serial Number 51& 52 of Chapter 7 of Schedule 2 of ITC (HS) classification of Export & Import Items is amended from free to prohibited till further orders".

(Issued from File No. 01/91/180/922/AMO8/EC (Vol. 4))