Will onions cost more in the UAE?

India, the world’s biggest exporter of onions, has imposed a 40 per cent export duty on onions with immediate effect.

An export duty of 40% has been imposed on onions to discourage their export and curb the recent spike in prices of the vegetable. Inflation in onion prices, which had remained negative since September 2021, shot up to 11.72% in July this year as against 1.65% in June and -20.5% in July 2022.

The UAE is among the biggest markets for Indian onions along with Bangladesh, Nepal, Malaysia and Sri Lanka. The curbs on export have been prompted by the scantiest rainfall in a century this month in onion-growing states in India, which are creating onion shortages in the domestic market.

August is the peak season in India for onion harvesting. Pakistan, China, and Egypt are among the other global exporters of onions.

The Ministry of Finance of India, which imposed the new export duty, wants to contain retail inflation caused by rising prices of vegetables and other food items. This is the second recent effort by India to contain retail inflation caused by food prices. Last month, India imposed a ban on non-basmati white rice. India accounts for about 40 percent of the world’s source of exported rice.

India’s onion exports in the first half of 2023 jumped 63 percent from a year ago to 1.46 million metric tons. Countries such as Bangladesh, Nepal, Malaysia, United Arab Emirates and Sri Lanka rely on Indian shipments.

Onions are used as the base for traditional dishes across Asia such as biryani in Pakistan and India, belacan in Malaysia, and fish curry in Bangladesh.

India’s annual retail inflation in July rose to its highest in 15 months as vegetable and cereals prices skyrocketed, putting pressure on the government to take action to bring down prices.

India surprised buyers last month by imposing a ban on widely consumed non-basmati white rice sales to dampen price rises.

Read also – A year after signing India-UAE CEPA Agreement, bilateral trade grew by 27.5% with exports to the region growing by 19.32%

– Agencies

Will onions cost more in the UAE? Will onions cost more in the UAE?