New Delhi: In the midst of an export ban on onions, Indonesia has formally requested 900,000 tonnes of onions from India, a top government official confirmed. This development holds significance as Indonesia stands as India’s largest trade partner in the ASEAN region and traditionally imports onions from the US, India, and New Zealand.
The request follows India’s imposition of a 40% export tax on onions in August, subsequently introducing a minimum export price of $800 per tonne in October. These measures aimed to stabilize domestic supply and prices due to a crop shortfall. Despite these efforts, soaring prices prompted a complete export ban in December, effective until the end of the 2023-24 financial year.
“After India’s export ban on onion, traders and importers in Indonesia have been requesting Indian onion, and there is a demand for 900,000 tonnes of onions worth $100,000. Hence, a request has been sent to the Indian government,”* stated the official.
India accounts for approximately a quarter of the global onion output and holds the position of the largest exporter after the Netherlands and Mexico. In the April-October period of the ongoing financial year, India exported 1.4 million tonnes of onions, with 36,146 tonnes going to Indonesia. For context, in FY23, India exported a total of 2.5 million tonnes of onions, including 116,695 tonnes to Indonesia.
The Indonesian Embassy in New Delhi responded, stating that they have not received any information on the issue. It highlighted that Indonesia is also an onion producer, particularly of small-sized red onions, and that imports from India accounted for only a portion of their total onion imports in 2023.
Exporters in India have faced challenges after the export ban, with containers being detained at port gates. This has resulted in significant losses for exporters, adding financial pressure to the already struggling onion farmers.
Onion production in India faced challenges due to erratic rains, extended dry spells, and adverse weather conditions. This led to a substantial decline in cultivation area and production, impacting onion farmers who have been grappling with losses over the past few years.
As of Wednesday, the average retail price of onions in India was ₹41.12 per kilogram, marking a 49.6% increase from the previous year. The export ban has not only affected Indian exporters but also led to a depression in onion prices in the domestic market.
With Indonesia’s formal request for onions from India, the situation underscores the complex dynamics of global trade and the interconnectedness of markets in addressing agricultural challenges.
