India’s decision to resume onion exports to select countries, including Bangladesh, on a government-to-government basis aims to address domestic price fluctuations and regional shortages
India has allowed onion exports to certain countries, including Bangladesh, on a government-to-government basis following a recommendation from the Ministry of External Affairs. Export quantities are limited, and specific details about the exporting agency are yet to be confirmed. The decision comes after India, the world’s second-largest onion exporter, imposed a ban on onion shipments from December 2023 to March 2024 due to domestic price hikes and potential shortages. This leads to higher prices in neighboring countries. Prior to that, The Bangladesh government had written a formal letter to India to allow certain quantities of sugar and onion imports to bring down prices in the domestic market during the holy month of Ramadan.
You can also read: 10 things to know about India’s election
The ban was implemented following a series of measures to control onion prices, including export duties and a minimum export price. Severe weather conditions further impacted onion production, leading to a significant drop in arrivals and subsequent price inflation.
Initially, India imposed a 40% duty on onions to discourage exports, but this measure was ineffective, prompting the ban. Earlier this month, a delegation of Indian government officials visited Maharashtra, the main onion-growing region, to assess the situation before recommending whether to continue the export ban.
Onion Export Destinations Include
Apart from Bangladesh, the Indian government has allowed the export of onions in limited quantities to other countries such as;
- Sri Lanka
- Mauritius
- Bahrain
- Bhutan
- Nepal and
- Among others
Worldwide Onion Export Trends
In 2022, onions exported globally amassed a collective value of US$4.26 billion.
From 2018 to 2022, the total worth of exported onions experienced an average increase of 18.6% across all exporting nations, marking a rise from the $3.6 billion valuation recorded in 2018. Comparing year-on-year figures, the international sales of onions saw a 5.8% increase in value, reaching $4.26 billion in 2022 compared to $4.03 billion in 2021.
The Netherlands, mainland China, India, Mexico, and the United States of America stand as the top five onion exporters, jointly responsible for approximately 63.4% of all onion exports in 2022, indicating a considerable concentration among major exporting countries.
In 2022, Europe led in onion exports with a value of $1.43 billion, constituting around 33.5% of the global total. Following closely, Asian exporters contributed 32.9%, while North America accounted for 19.7% of worldwide shipments.
Additionally, Africa accounted for 7.3%, Latin America (excluding Mexico but including the Caribbean) contributed 4.1%, and Oceania represented 2.4%, predominantly from New Zealand and Australia.
According to the ‘World’s Top Exports’ website, the top 15 nations in terms of onion export value in US dollars in 2022 are listed below;
The onions export landscape witnessed notable growth among leading exporters in 2021, with Egypt (increasing by 53.5%), Canada (rising by 49.4%), Poland (growing by 47.4%), and Afghanistan (seeing a 45% uptick) emerging as the fastest-growing contributors.
Conversely, a group of significant onion suppliers experienced declines in their export sales, notably Pakistan (experiencing a -68.9% decrease from 2021), New Zealand (down by -27.4%), and France (down by -17.5%).
Countries Earning Largest Trade Surpluses from Onions
According to the ‘World’s Top Exports’ website, the nations listed below had the most positive net exports of onions in 2022.
Onion Surpluses Countries
Netherlands: US$709.4 million (net export surplus up 14.1% since 2021)
mainland China: $563.2 million (up 29.3%)
India: $523.8 million (up 20.2%)
Mexico: $400.9 million (up 7.5%)
Egypt: $217.2 million (up 53.3%)
Spain: $133.2 million (up 26.8%)
Peru: $104.6 million (up 5.5%)
New Zealand: $78.8 million (down -28.9%)
Poland: $52.5 million (up 31.6%)
Afghanistan: $46.9 million (up 41.4%)
Myanmar: $38.6 million (up 10.2%)
Uzbekistan: $34.8 million (up 39%)
Türkiye: $28.5 million (down -36.3%)
South Africa: $24.6 million (down 15.5%)
Morocco: $21.3 million (up 5.8%)
Countries Causing Worst Onions Deficits
According to the ‘World’s Top Exports’ website, the nations listed below had the largest net export deficits of onions in 2022.
Worst Onion Deficits Countries
United Kingdom: -US$253.6 million (net export deficit up 57.5% since 2021)
United States of America: -$247.5 million (down -9.1%)
Vietnam: -$242.8 million (up 1026.8%)
Malaysia: -$204.6 million (up 2.5%)
Japan: -$178.3 million (up 40.9%)
Canada: -$167.5 million (up 24.5%)
Bangladesh: -$145.2 million (down -5.6%)
Germany: -$132.8 million (down -21.6%)
United Arab Emirates: -$107.9 million (up 51.2%)
Indonesia: -$92.3 million (up 71.4%)
Sri Lanka: -$82.8 million (down -30.2%)
Saudi Arabia: -$65.3 million (down -26.7%)
Pakistan: -$58.2 million (reversing a $122.7 million surplus)
Russia: -$56.4 million (up 16.1%)
Ukraine: -$55.8 million (up 883.5%)
Onion Production Countries In 2024
The nations listed below have the largest onion producers in 2024.
Country-wise onion production (in thousand metric tons)
Bangladesh: Top Onion Importer
Not only is Bangladesh a significant onion market, but it also holds the title of being the world’s foremost importer of onions in terms of quantity. This distinction is drawn from an analysis of country-specific onion import data. As per the National Board of Revenue (NBR), Bangladesh imported an astonishing 727,000 tons of onions in 2022, surpassing all other nations in onion imports for that year.
According to the United Nations Commodity Trade Statistics Database (UN Comtrade), the United States follows Bangladesh as the second-largest importer with 660,000 tons, and Malaysia comes in as the third-largest importer of this kitchen staple with an import of 525,000 tons that year.
Bangladesh continues to grapple with insufficient domestic supply to meet demand. Consequently, the country’s dependence on onion imports, a crucial cooking ingredient, has surged, elevating Bangladesh to the apex of the global list regarding onion imports.
Why is Bangladesh the World’s Top Onion Importer?
Bangladesh stands as the world’s leading onion importer by volume due to a confluence of domestic factors and international dynamics. Primarily, the nation’s heavy reliance on onions as a dietary staple, coupled with fluctuating domestic production, drives its need for imports. Onions are integral to Bangladeshi cuisine, featuring prominently in various dishes, thus creating a consistent demand.
However, Bangladesh’s onion market is not merely a reflection of consumer preferences; it is also influenced by market syndicates that wield significant power. These syndicates, comprising traders, and middlemen control the onion trade. They often manipulate prices through hoarding, artificial scarcity, and speculative trading, exacerbating price volatility and forcing the government to intervene.
Furthermore, Bangladesh’s geographic location and limited agricultural land restrict its ability to meet domestic demand through self-sufficiency. Climate-related disruptions, such as floods or cyclones, can devastate local harvests, necessitating imports to stabilize supply.
Despite efforts by the government to curb syndicate influence and promote domestic production, challenges persist. The syndicates maintain a stronghold over the onion trade, resisting reforms that could potentially undermine their profits. Consequently, Bangladesh continues to rely heavily on onion imports, solidifying its position as the world’s leading importer by volume.
In conclusion, India’s decision to resume onion exports to select countries, including Bangladesh, on a government-to-government basis aims to address domestic price fluctuations and regional shortages. This move follows strategic recommendations amidst global onion export dynamics. However, challenges persist in stabilizing prices and meeting demand, particularly in countries like Bangladesh, which holds the title of the world’s top onion importer due to complex domestic driving. The government of Bangladesh should take more effective steps to control these domestic factors.
