India is mulling a ban on the export of onion in order to ensure domestic supply and prevent steep rise in prices that could lead to a further stoke inflation.
Over the past few weeks, the prices of onion have increased sharply. The prices have reached a hit a two-and-a-half-year high on 17 July due to a shortage of supply as a result of heavy rains in states such as Maharashtra.
While wholesale price has soared about 50% in a month, the retail prices have more than doubled in some areas. The demand for onion is expected to further increase during the Muslim fasting month of Ramadan, which started on 9 July.
Commenting on the price rise, a senior government official said that the government is closely evaluating the onion prices, and is thinking of various steps including a ban on onion exports in order to control prices.
India exports 10% of its overall onion output, primarily to Bangladesh, Malaysia and Singapore. India exported 511,616 tons of onion in first quarter of the fiscal, compared to 517,274 tons in the same period the earlier year.
