Anxious about the impending general election, Indian authorities are tightening their grip on the country’s supply of agricultural commodities, particularly wheat, sugar, and onions. Exports of onions are banned, sugar for ethanol production is restricted and allowable wheat stocks are reduced, according to the Financial Times.
As a significant agricultural producer in the world, India struggles to strike a balance between exports and the country’s internal demand for inexpensive, subsidized food.
Due to worries about food inflation, the actions and current export limitations have had an impact on world prices. These actions, according to critics, would hurt India’s export market and favor rival countries like Brazil.
Asia is already feeling the ban on onion export, as prices went up and left consumers to seek alternatives at a lower cost, Reuters reports.
The onion export ban is set to remain in place until March 31, 2024, per Reuters.
“Onions are needed for almost everything we cook,” said a buyer from Dhaka, Bangladesh. “This sudden price hike is tough to swallow. I’ve had to cut back on how much I buy.”
Now Bangladesh is scrambling to overcome the shortage by sourcing onions from China, Egypt, and Turkey, Reuters reports, citing commerce ministry official Tapan Kanti Ghosh.
Bangladesh’s government has started selling onions to the underprivileged at reduced prices in an effort to counteract a more than 50% increase in costs following India’s ban, as the country’s general elections get nearer.
The situation in landlocked Nepal, where most of its onions are imported, is even worse.
“Since the ban by India, we have monitored the supply situation at different places. There are no onions on sale,” said Tirtharaj Chiluwal, a Nepalese commerce ministry official told Reuters.
A week following the prohibition, merchants reported that onions in India dropped 20% as supplies from the harvest for the upcoming season arrived.
India should permit exports, according to exporter Shah, to preserve its place on the international market, as local resources are currently more than sufficient to meet domestic demand.
Nevertheless, the Mumbai-based exporter stated that the restrictions are unlikely to be lifted before the general elections of the next year, as keeping food costs down is the top goal for Prime Minister Narendra Modi’s administration.
