As India bans onion export, prices in Nepal go up at least 25 percent overnightThe ban comes six months after it was lifted in March after heavy rains damage the crop in southern India, according to Indian media reports.
With India once again imposing a ban on the export of all varieties of onions, its market price in Kathmandu has gone up as much as 25 percent within a day.
The wholesale price of onion jumped to Rs75 per kg during Tuesday morning trade from Rs60 per kg on Monday, according to Kalimati Fruits and Vegetable Market Development Board that updates rates of fruits and vegetables.
On Monday, the Directorate General of Foreign Trade, India issued a notice stating that the export ban on all varieties of onion with the immediate effect. The ban comes six months after it had been lifted in March.
Retailers have already started charging over Rs100 per kg on Tuesday, a trader at the Kalimati market told the Post.
“Many traders in the Kalimati vegetable market have started hiding onions as they are looking for a big profit if severe shortage appears in the market,” said a trader who did not want his name revealed.
The existing stock at the market could last for two weeks but traders have already started taking advantage of India’s export ban, traders said.
Every year between September and November the demand for onions increases in India with the approach of the festive season and as a result prices in Nepal also go up.
According to the Indian media reports, the Indian government initiated the move as prices trebled in a month after excessive rainfall hit crops in its southern states of Karnataka and Andhra Pradesh.
Wholesale prices in India's largest onion trading hub, Lasalgaon in the western state of Maharashtra, have nearly trebled in a month to IRs 30 per kg (Rs48 per kg), Indian media reports said.
India is the world's biggest exporter of onions, a staple in South Asian cooking. Countries such as Bangladesh, Nepal, Malaysia and Sri Lanka rely on Indian shipments.
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. The ban was lifted on March 15.
Following the ban last year, retail prices had jumped on the short supply, with the spice costing up to Rs250 per kg during the festival season.
Nepal is almost totally dependent on onion shipments from India as domestic production is negligible. Last year Chinese onions had replaced Indian ones in the market but according to traders, consumers prefer the Indian variety.