Onion price soars by 28 per cent

By Laxman Kafle,Kathmandu, Aug. 22: The price of onion has soared in Nepal immediately after the government of India imposed tax on its export on Saturday.

The Indian government imposed a 40 per cent tax on onion exports to control its price in the market discouraging export so the price of onions in the Nepali market has increased.

The impact of India's decision has been seen in Nepal, which is dependent on India for onions.

The price of onion has increased by Rs. 17 per kilogram (28 per cent) to Rs. 78 in Kalimati wholesale market in a single day on Monday. The price of onion was Rs. 61 per kg on Sunday.

However, the price of onion in the retail market was above Rs. 90 per kilogram on Monday.

Binaya Shrestha, information officer of Kalimati Fruit and Vegetable Market Development Board, said that the price of onion has increased in the market due to increased import cost of onion after the government of India imposed tax.

He, however, said that it was a must to strictly monitor the market, including the wholesale and retail market, to control artificial price hike of onion.

"It is natural for the price of onion to increase when the import price increases, but whether the price of the onion that has been imported through the customs clearance has increased or the price of the onion that has been imported illegally has increased, it should be monitored," he said.

The supply of onion into the Kalimati market is reduced on Saturday and Sunday.

“Two days ago, 100 tons of onions were imported into Kalimati every day, but only 84 tonnes and 47 tonnes were imported on Sunday and Monday respectively. Although the import has decreased in the last two days, it is not possible to say how the onion import will go. When customs are closed, imports usually decrease during holidays," he said.

Wholesaler of Kalimati Market Bhagawan Chandra Upreti said that due to the increase in prices, there has been a decrease in imports since traders are not interested in ordering onions from India.

He said that the dependence on India for onions is the main reason behind the current increase in onion prices.

Whenever the Indian government decides to impose a ban or tax on onion export, then the price of onion in Nepal increases rapidly.

A team of the Department of Commerce, Supplies and Protection on Monday monitored the Kalimati market after the price of onion increased significantly in a single day.

Onion worth Rs. 6.75 billion imported in FY 2022/23

The country imported around 180,200 tonnes of onions worth Rs. 6.75 billion in the last fiscal year. The government collected revenue of Rs. 778 million while importing 180,200 tonnes last year.

Similarly, onions worth Rs. 6.17 billion had been imported in the fiscal year 2021/22 and Rs. 5.95 billion in the fiscal year 2020/21.

Most of the onions are imported from India whereas only a nominal quantity of onion in Nepali market comes from China. Thus, the price of onion in the local market depends on its price in the Indian market.

According to National Centre for Potato, Vegetable and Spice Crops Development, the local production of onion covers only around 60 per cent of the national annual demand.

The annual demand for onion is above 400,000 tonnes. However, around 250,000 tonnes to 300,000 tonnes are being produced in the country annually, it said.

The local onion is consumed within four-five months of the production season. And then, the country totally depends on imported onions.

 Nepal holds good potential for onion production. However, the country is spending billions of rupees for onion imports due to low production against growing demand caused by changing food habits of the people.

The lack of easy availability of onion seeds for the farmers is a bottleneck to increment production, a government official said, adding that the production of onion seeds is very difficult technically.

The country will depend on foreign countries for onion until and unless production is increased by encouraging farmers towards commercial production of onion.

Farmers of few districts including Bara, Parsa, Rautahat, Saptari and Siraha are growing onions commercially.