Onion exports to crisis-hit Sri Lanka and Bangladesh, import levy

Onion exports to Sri Lanka and Bangladesh have slowed due to the current financial crisis in Sri Lanka and measures taken by the Bangladeshi government to encourage local production in addition to imposing a tax on imported onions. Bangladesh is the biggest importer of onions from India, followed by Sri Lanka.

Exporters from Nashik, the country’s largest onion-growing belt, say exports to Sri Lanka have fallen due to late payment. The island nation is in the grip of its most painful economic downturn since its independence in 1948, with severe shortages of essential goods and regular power outages.

Exporters said total exports to Sri Lanka and Bangladesh increased from 4,000-5,000 tonnes per week to 1,500 tonnes per week.

Exporters who did not wish to be named said they had not yet received payment for shipments sent as of December 2021. The payment window has been reduced from 15 to 20 days to two to three months due to the monetary crisis in the country, said an exporter. Exporters fear that if the government does not take immediate action, it will face serious consequences.

Manoj Jain, a major exporter from Lasalgaon, said exporters face several challenges which should be addressed by the government. Container prices have nearly quadrupled in the past two years, making it difficult to export raw materials.

Bangladesh, on the other hand, encourages local onion cultivation and has also imposed an import tax of around 2.80 taka per kg. The move was taken after frequent export bans imposed by the Indian government led to higher onion prices in local Bangladeshi markets, he said. Bangladesh has to import 0.8 to 1 million tons of onions every year, the majority of which is imported from India.

Another exporter said that other countries including Pakistan, Myanmar and Afghanistan have taken advantage and conquered the market in the absence of India, and now it has become difficult for India to win back the market.

Suvarna Jagtap, president of Lasalgaon APMC, said exports to Bangladesh and Sri Lanka have been affected due to import permits collected by Bangladesh and the Sri Lankan economic crisis. Nashik’s demand for onions has also declined since other states started producing onion, she said.

Ajit Shah, president of the Horticulture Exporters Association, said exports are expected to increase as no other countries currently have stocks.
India exported 15.88 lakh ton in 2017-18 season, 21.82 lakh ton in 2018-19 season, 18.49 lakh ton in 2019-20 and 15.75 lakh ton in 2020 -21. In FY21, India exported $378 million worth of onions, 15% more than the previous year. The main export destinations are Bangladesh ($101 million), Malaysia ($62 million), United Arab Emirates ($44 million) and Sri Lanka ($42 million). ).

Indian onions have established markets, especially in West Asian countries, Bangladesh, Indonesia, Sri Lanka, and the United Kingdom, among others.
India’s onion production is expected to increase by 16.81% to 31.12 million tonnes in the crop year starting July 2022 due to a likely increase in acreage. The country had harvested 26.64 million tons of onions in the 2021-22 crop year (July-June).

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