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Informist, Monday, Dec. 8, 2025

 

By Pallavi Singhal

 

NEW DELHI – India's onion prices edged up slightly Monday after Bangladesh allowed limited imports of the bulb last week. However, traders and experts said the export volume allowance to the neighbouring country is too small to absorb India's large surplus of onions, subduing the prospects of any sustained rally in prices.

 

Bangladesh's agriculture ministry said Saturday it will issue 50 import permits a day, each allowing up to 30 tonnes of onions, effectively capping daily imports at 1,500 tonnes. The measure, aimed at stabilising the local market, will remain in force until further orders, Bangladesh said. 

 

The announcement triggered a modest rebound in prices of new kharif arrivals in Maharashtra, India's key onion growing region. "Rates have strengthened by about INR 2–INR 3 per kg," said Bharat Dighole, president of the Maharashtra State Onion Growers Association. "The average price was around INR 2,200 per 100 kg on Saturday and rose to about INR 2,400 today (Monday). It may rise another INR 4 per kg by the end of the week."

 

But the upside is already being checked by swelling supplies. "Arrivals jumped nearly 30?tween Saturday and Monday in Pimpalgaon and Lasalgaon alone as farmers rushed produce to markets after the import window opened," said Vikas Singh, vice-president of the Horticulture Exporters and Produce Association. "The sentiment has improved, but the Bangladesh window is too small to absorb India's surplus," he added.

 

Government data underlined the weakness in broader market. According to the consumer affairs ministry, average wholesale onion prices stood at INR 2,015 per 100 kg on Monday, less than half of INR 4,309 per 100 kg a year earlier.

 

At current levels, prices are hovering at the cost of production of about INR 2,000–INR 2,200 per 100 kg, offering no financial relief to farmers. Singh said a sustained rise of even INR 5 per kg could influence sowing decisions for the ongoing rabi crop, particularly with reservoir water levels higher this year. "But I do not see Bangladesh extending its import window beyond Dec. 13. Their own (crop) arrivals are likely to rise by then," Singh said.

Bangladesh relies on imports to meet its domestic onion demand, sourcing mainly from India, its largest traditional supplier, followed by China and Pakistan. In calendar year 2023, India's total onion exports accounted to 2.53 million tonnes, of which about 35%--880,000 tonnes-- were exported to Bangladesh. While Dhaka opened an import window between Aug. 14 and Dec. 13, permits were not issued until this week. With imports ending Dec. 13, India will effectively be able to export about 10,500 tonnes. 

 

India, one of the world's largest onion producers, grows about 28–30 million tonnes a year, with the rabi crop accounting for nearly 70% of the total output. The rabi harvest, which begins in late March, supplies the market through most of the following year until the next kharif crop arrives.

 

The present glut traces back to last season's bumper output. Production climbed to 30.7 million tonnes in 2024–25 from 28.4 million tonnes in the previous year, according to industry estimates.

 

Exports, meanwhile, have fallen sharply. India shipped only about 1.2 million tonnes of onions in 2024–25 (Apr–Mar), less than half the 2.5 million tonnes exported the previous year. The decline followed a complete export ban imposed in December 2023, which was lifted in May 2024 with steep duties and minimum export prices that made overseas sales unviable. Although the 20% export duty was removed on Apr. 1, shipments remained sluggish. Bangladesh once accounted for nearly a third of India's onion shipments, but it has bought negligible quantities, around 12,000 tonnes, in the past eight months.

 

Exporters say frequent policy shifts have structurally altered trade flows. "Bangladesh has become largely self-sufficient using Indian seeds, while buyers such as Saudi Arabia and Sri Lanka expanded local production during India's export ban," Singh said. Pakistan, once a seasonal importer from India, has also emerged as a major supplier after farmers expanded acreage during the restriction phase.

 

Bangladesh, still India's largest onion buyer, formally opened imports between Aug. 14 and Dec. 13, but began issuing permits only this week. Traders said Bangladeshi buyers are actively booking cargoes as local prices there remain elevated, but limited daily volumes, which means the impact on India's bloated supply pool will remain modest.

 

As a result, market participants said Bangladesh's move is likely to provide only short-lived support to Indian onion prices unless exports revive more broadly or domestic arrivals ease sharply.   End

 

Edited by Tanima Banerjee

 

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