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After the tomato, the price of onion is getting dearer, making the kitchen costlier for Nepalis. After India imposed a 40 percent export duty on onion, the price of onion in the Nepali market has surged by 29 percent. 

The whole price of onion in the Kalimati Fruit and Vegetable Market rose to Rs 80 per kg on Monday from Rs 62 per kg on Sunday. The retail price, according to vegetable traders, has increased to Rs 90-100 per kg from Rs 70 kg. 

While the average daily supply of onions to the Kalimati Market is 100 tons, it has fallen to 40 tons on Sunday. 

The Indian government on Saturday imposed a 40 percent export duty on onions to improve domestic supplies and tame inflation. The export duty will be in effect until 21 Dec 2023. According to Indian media, the step has been taken to improve the domestic availability of onions and contain the price rise.

Nepal heavily relies on imported onions from India due to minimal domestic production. The country imported 180,190 tons of onions worth Rs 6.75 billion in the last fiscal year. As per the Agriculture Ministry, in the fiscal year 2021/22, Nepali farmers cultivated onions across an area of 13,189 hectares and produced 166,904 tons.

Nepal is among the top five export destinations of Indian onions. In the April-June 2023 period, India exported onions to 65 countries, of which a maximum quantity of 1.39 lakh tons was shipped to Bangladesh. Besides Bangladesh, Malaysia (1.07 lakh metric tons), United Arab Emirates (0.90 lakh metric tons), Sri Lanka (0.80 lakh metric tons), and Nepal (0.39 lakh metric tons) are among the top five destinations of Indian onions.

However, even before the Indian government moved, the price of onion in the Nepali market has been increasing, mainly due to the government’s decision to impose value-added tax (VAT) on imported vegetables. 

Prior to the budget announcement on May 29, onions were being sold at Rs 16 per kg in the wholesale market. However, following the budget announcement, their price escalated to Rs 32 per kg. And, on Sunday, the average wholesale price of onions reached Rs 62 per kg in the Kalimati Market.

The Nepal Stock Exchange (NEPSE) gained 17.69 points to close at 2,015.98 points on Tuesday.

Similarly, the sensitive index surged by 3.36 points to close at 385. 98 points.

A total of 6,031,356-unit shares of 277 companies were traded for Rs 1. 33 billion.

Meanwhile, Kutheli Bukhari Small Hydropower Limited was the top gainer today, with its price surging by 9. 98 percent.

Likewise, Laxmi Laghubitta Bittiya Sanstha Ltd. was the top loser as its price fell by 4.42 percent.

At the end of the day, total market capitalization stood at Rs 3. 01 trillion.

The price of gold has increased by Rs 200 per tola in the domestic market on Tuesday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 110, 500 per tola today. It was traded at Rs 110, 300 per tola on Monday.

Meanwhile, tejabi gold is being traded at Rs 109, 950 per tola. It was traded at Rs 109, 750 per tola.

Similarly, the price of silver has increased by Rs 25 and is being traded at Rs 1,415 per tola today.

With India reeling under tomato shortage, the export of Nepali tomatoes to the southern neighbor has surged dramatically in the past one month. Nepal has exported 670 tons of tomatoes to India in Shrawan (mid-July to mid-August).

The preliminary data of the Department of Customs shows tomatoes worth Rs 8.7m were exported from Nepal to India. According to traders, the shortage of tomatoes in the Indian market has increased demand for Nepali tomatoes, resulting in a sharp rise in exports. The demand for Nepali tomatoes has increased especially from border Indian cities.

The Customs Department officials said major customs offices saw a huge shipment of tomatoes from Nepal to India in the past one month, especially through Birgunj, Bhairahawa, and Kakarbhitta customs. According to Shovakant Poudel, Director General at the Customs Department, tomatoes were exported to India in high volume in the last one month. According to traders, 15-20 tons are being exported to India from Birgunj, the main custom point of the country.

Due to substantial exports of tomatoes by Nepali traders to India, the domestic markets are grappling with supply limitations, leading to significant price surges. The wholesale price of large tomatoes rose steeply by a staggering 385 percent, from Rs 35 per kg to an astonishing Rs 170 per kg.

With traders preferring exports to India, the supply of tomatoes to Kalimati Fruits and Vegetable Market has declined by 50 percent. “The supply of tomatoes has fallen to 35 tons per day from earlier 65 tons,” said Binay Shrestha, information officer at the Kalimati Fruits and Vegetable Market Development Board. According to Shrestha, the local market in Kathmandu is currently getting tomatoes from three neighboring districts—Kathmandu, Bhaktapur, and Lalitpur.

The tomato exports to India surged in the last two months as the southern neighbor experienced a shortage of tomatoes. While Nepal has been requesting India to facilitate the imports of vegetables including tomatoes, the southern neighbor has restricted the tomato imports.

However, faced with a shortage and steep price rise, India in the first week of August lifted import restrictions on tomatoes. The relaxation of quarantine rules for Nepali tomatoes will last till October 31, according to officials of the Ministry of Agriculture and Livestock Development.

Tomato production decreased in India, especially in the top 10 tomato-producing states - Andhra Pradesh, Madhya Pradesh, Karnataka, Gujarat, Odisha, West Bengal, Telangana, Chhattisgarh, Maharashtra, and Bihar, leading to a steep price rise.

Given the Indian restriction, tomatoes have never been among Nepal’s significant export items to India, despite the country’s export of various agricultural products like tea, cardamom, cabbage, and ginger. In the fiscal year 2022/23, the top three export commodities to India were refined palm oil, soybean oil, and cardamom.

However, tomato exports to India did surge in the last fiscal year to 1094 tons compared to 40 kg in 2021/22.  Interestingly, these 1094 tons of exports happened in Ashar (mid-June to mid-July), which is the last month of the Nepali fiscal year.

Nepali farmers grow tomatoes on 22,600 hectares and produce more than 432,000 tons annually, according to the Agriculture Ministry.

According to the Agriculture Ministry, Nepali farmers cultivate tomatoes across an area of over 22,000 hectares and produce over 400,000 tons annually. In 2021/22, Nepal produced 422,703 tons of tomatoes on 22,911 hectares.

However, Nepal still imports a huge quantity of tomatoes from India every year. The latest data from Customs Department shows the country imported 42,105.60 tons of tomatoes totaling Rs 610.86m in 2022/23.