Why in news?

The Centre has lifted the prohibition on onion exports imposed nearly six months ago. However, restrained the free flow of outbound shipments by stipulating a minimum export price of $550 per tonne as well as a 40% export duty.

What’s in today’s article:

• Production of Onion in India
• Centre lifts onion export ban

Production of Onion in India

• Background
  • Onion production in India is a significant agricultural activity and plays a crucial role in the country's economy.
  • India is the second-largest onion-growing country in the world. The Indian onions are famous for their pungency and are available round the year.
  • Indian onions have two crop cycles:
    • First harvesting which starts from November to January (Rabi)
    • the second harvesting from January to May (Kharif).
  • The choice of season depends on the region's climate and the onion variety being cultivated. Onions are more commonly associated with the Rabi season.
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• Varieties
  • India cultivates various onion varieties, with the most common ones being red onions and white onions.
  • There are certain varieties of yellow onion which are suitable for export in European countries.
• Cultivation Practices
  • Onions are primarily grown through seeds, although bulb-to-bulb planting is also practiced.
  • The crop requires well-drained soil and is often cultivated in sandy or loamy soils.
  • Adequate irrigation is essential, and farmers may use drip irrigation systems to conserve water.
• Onion producing states
  • The Major Onion producing states are Maharashtra, Karnataka, Madhya Pradesh, Gujarat, Bihar, Andhra Pradesh, Rajasthan, Haryana and Telangana.
  • Maharashtra ranks first in Onion production followed by Madhya Pradesh.
• Production
  • As pr the govt estimate, Rabi crop (2024-25), which has a share of around 60% of total annual onion output, is around 191 lakh tonnes.
  • The monthly domestic onion consumption is around 17 lakh tonne
• Export
  • The country has exported 2,525,258.35 MT of fresh onion to the world, worth Rs. 4,522.79 crores/ 561.38 USD Millions during the year 2022-23.
  • Major Export Destinations (2022-23): Bangladesh, Malaysia, UAE, Sri Lanka, Nepal and Indonesia.

Centre lifts onion export ban

• Govt has lifted the ban on onion exports, in a move that is likely to bring huge relief to farmers and traders in Maharashtra.
  • Exports in onion were banned in early December 2023 citing high food inflation and supply worries.
  • Onion growers in many parts of Maharashtra have been protesting against the export ban alleging it has hit their earnings as mandi prices at Lasalgaon are ruling around Rs 15/kg, which barely covers the cost of production.
• But the move comes with conditions. Traders can ship out onion at a minimum export price (MEP) of $550/tonne and pay another 40% export duty on this price, which translates to Rs 64,000 per tonne or Rs 64 per kg.