Like the previous year, India imposes the ban to curb the rising price of the cooking ingredient in its domestic market
India on Monday banned exports of all varieties of onion, except those cut, sliced or in powder form, with immediate effect to cap its rising prices in the domestic market.
India's Directorate General of Foreign Trade in a notice on Monday said, "The export of all varieties of onion is prohibited with immediate effect."
Like the previous year, flood has ruined most of India's onion production, prompting the supply crunch.
The country came up with the decision at a time when increasing onion prices in Indian market have already edged up prices of the kitchen item in Bangladesh for more than two weeks.
Quoting an official aware of the development, Indian media reported, "Rates have increased and there is shortage of onion in the domestic market. While this shortage is seasonal, a huge amount of exports were done in the last few months during the Covid-19 pandemic."
Bangladesh, Malaysia, the UAE and Sri Lanka are the top importers of Indian onions.
India in 2019 also banned exports of onion in the wake of its price hike there and set the minimum export price of onion at $850 per tonne to curb its shipments.
The restriction fuelled up onion prices in Bangladesh almost overnight, skyrocketing to Tk250 per kilogram.
People in the country had to suffer for months due to the unusual onion prices. At the end of last year, the government had to import onions from Myanmar, Pakistan, China and Egypt for the first time.
Despite that measure, the local onion market did not return to normalcy until locally grown onions arrived at the market.
India at that time said the ban was to help bring down soaring prices of onion in Indian market due to supply shortage caused by flooding. It lifted the minimum export price in March 2020, making the bulb free for export again.
In Bangladeshi market, onion prices have already been climbing up for more than the last two weeks. Imported onions have doubled to Tk50-55 per kg from Tk25-30, while the locally grown onions have reached Tk60-65. Some traders were selling red onions even at Tk70 per kilogram in Dhaka.
The prices were hovering around Tk40-45 even two weeks ago.