Export Restrictions Fail to Control Onion Prices in the Country

Last week’s jump in the minimum export price (MEP) of onions to $1,200 per ton wasn’t enough to lower costs in the local market, with citizens still paying up to Rs. 240 per kg for the versatile staple food. Exporters pressured the Commerce Ministry to set a higher MEP to curb growing prices but the move has failed and made things more difficult. A local vendor told a national daily that onions from Balochistan and Sindh were being sold for Rs. 220-240 per kg, while the superior export-quality now costs Rs. 250 per kg in the wholesale market. Despite growing exports to earn more dollars, some traders are procuring onions from Afghanistan and Iran to meet local demand. The apparent benefactors are exporters rather than consumers, who pay higher costs for imported onions despite a lack of quality and taste as compared to Pakistani onions. It has been pointed out that growers are the biggest losers in this business since exporters (and other market players) bought large quantities of onions for hoarding purposes. The wholesale price of onion ranges between Rs. 150 and Rs. 200 per kg, and large exporters with firms and companies in multiple countries have no issue lifting expensive and high-quality onion types for better margins. Some elements are taking advantage of India’s recent ban by lifting top-grade onions for big shipments. This comes roughly a week after the Commerce Ministry set the MEP of onions and shallots at $1200 per metric ton at freight on board (FOB). The export of onion is now allowed only under Advance Payment terms. It bears mentioning that onion prices have climbed due to heavy buying by exporters after India restricted onion exports till March 2024.