Onion prices bring tears to Nepali eyes

Kathmandu, November 28: The Indian government’s recent decision to impose minimum export price (MEP) on onions has made the commodity costlier in the domestic market.

In a bid to increase the supply in its domestic market and keep the prices in check, the Indian government announced it was imposing MEP of $850 per tonne on onions starting last Thursday till December 31, barring Indian traders to export onions to Nepal and other countries below the minimum rate.

Nepal relies on India for more than 80 per cent of its onion demand — a vegetable widely used in preparing most Nepali dishes. Hence, this decision of the Indian government has significantly reduced the supply of onions in the local market here, resulting in surging price of the popular vegetable.

In fact, price of onion in the retail market of Kathmandu Valley has surged by eye-watering Rs 40 per kilogram in the past few days. The price of a kilogram of onion that was available in the domestic market at Rs 70 last Thursday has soared to as high as Rs 120 today.

“The Indian governments’ decision to fix MEP intended to temporarily discourage onion export to sustain their domestic demand. Its ripple effect is obvious following significant drop in supply of Indian onions to the Valley’s market,” said Tej Prasad Poudel, executive director of Kalimati Fruits and Vegetables Market Development Board (KFVMDB).

Moreover, Poudel informed that a number of Nepal-bound trucks carrying onions have been stuck at the Indian customs following the implementation of MEP.

“Three or four Nepal-bound trucks carrying onions that Nepali traders had placed the purchase order for before the Indian government fixed the MEP are awaiting clearance at the Indian customs office,” said Poudel.

Indian government implements MEP in different types of vegetables every time its domestic market faces supply constraints. Earlier too, the Indian government had imposed MEP on onions for a few months and scrapped it in December of 2015.

Meanwhile, vegetable wholesalers have appealed the government to develop warehouses to store vegetables like onions and potatoes, which are largely supplied to the Nepali market from India.

“With negligible domestic output, almost 60 tonnes of onions are imported from India every day to cater to the Valley’s demand. As the Indian government’s decision intends to discourage onion export, this is certain to affect onion supply and its price in the country,” said Bharat Khatiwada, president of Vegetable Wholesalers’ Association of Nepal.

According to him, the government should ensure warehouse facility for vegetable traders in a bid to tackle sporadic supply crunch of vegetables. The Himalayan Times 

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