Onion price surged by 29 percent

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.