Last September, the Indian government prohibited the export of all varieties of onion due to inadequate supply in the Indian market, leading to severe shortages of the kitchen staple in Nepal and other South Asian countries.

Retail prices jumped on the short supply, with the vegetable costing up to Rs250 per kg during the festival season last year. The price of onion currently ranges from Rs80-90 per kg.

On March 2, the Directorate General of Foreign Trade, India issued a notice stating that the export ban on all varieties of onion had been unconditionally revoked with effect from March 15.

Nepal is almost totally dependent on onion shipments from India as domestic production is negligible. The government had launched an onion mission programme by investing a huge amount of money, but it got nowhere due to lack of proper planning and essential infrastructure like cold storage.

According to Binaya Shrestha, deputy director at the Kalimati Fruits and Vegetable Market Development Board, supply has normalised in recent days with the market receiving around 70 tonnes of onion daily.

“The market received 1,555 tonnes of onion between February 13 and March 5,” he said. The wholesale price has been gradually decreasing from last month.

As the country is totally dependent on the southern neighbour to meet its onion requirement, the domestic price depends on prices in India, he said. “For this reason, we cannot predict whether prices will go up or down,” Shrestha said.

The market was receiving around 80 tonnes of onion daily before the export ban by India, he said.

Shyam Prasad Lamichhane, manager at the Balkhu Agriculture and Vegetable Market, said that the market receives 50-55 tonnes of onion daily. Deliveries have increased with the surge in production, he said. Onion sells for Rs65 per kg at the Balkhu market, he added.

Traders have been shipping onion to markets in Nepal even before the publication of a formal notice lifting the export ban, Lamichhane said.

According to Indian onion trader Ritesh Kumar Gupta, owner of Aditya Shree Enterprise, he has been supplying onion through traders based in the border towns, especially in Sarlahi and Lahan.

The supply has increased in recent weeks with the arrival of the new harvest, he said. As prices are high in the Indian market, it will take time for them to return to pre-ban levels, he added.

Nepal imported onions valued at Rs1.75 billion during the period mid-July to mid-February this year compared to Rs2.92 billion during the same period last year, as per the statistics issued by the Department of Customs.

According to the Economic Times, the Indian government decided to lift the ban with prices likely to fall sharply due to a bumper rabi crop (crops that are planted in the winter and harvested in the spring). Bangladesh, Sri Lanka and the UAE are the three largest buyers of Indian onions, it said.