India’s Nashik district managed to ship 18,000 tonnes of onions between October 1 and 14, 2023 despite 40% export duty.

The margin marks a momentous renewal of exports, which had plummeted from 42,268 metric tonnes in July to 21,832 tonnes in August. September was the first month after the levy update to see a gradual recovery in exports when shipments hit 31,000 tonnes.

This rebound is happening when onion reserves from the December-January harvest, also known as the rabi season, are waning. To compound the situation, insufficient rains this year in the northern region of Maharashtra will see a late-coming red onion harvest. The delay in the kharif crop, which is usually available during monsoon between September and October, will push prices up even further.

The result has been an increase in local wholesale prices of onions by 30% within Nashik. Bulk purchases in forty-foot equivalent containers also spiked from INR2,050 to 3,200 ($38.53) per quintal between September and October.

Nashik district in Maharashtra is India’s number one state for onions and is a benchmark price setter. This season, the district is surprisingly having higher prices than other regions, at 32-33 rupees ($0.39-0.40) per kilogram.

Delhi’s onion belt, comparatively, has increased its wholesale benchmark by between 5 and 7% in recent months to Maharashtra’s 15%.

This is in contrast to the situation in March 2023 when prices were so low that farmers raised a protest. Heavy rains during the previous monsoon postponed planting, hence an onion glut in March this year.

If rabi stocks ebb before the next harvest in November, prices will be unmanageable, compounded by the duty increment.

India was by no means the only country to restrict exports via tariff increment. Its Indus valley neighbor, Pakistan, had raised duty on onions by 180% in February, 2023.

Onions are an indispensable commodity in India’s cuisine to the extent that they determine national and foreign policies alike. In 2019, for instance, the country banned all onion exports to preserve local supplies.

India is the second biggest onion-producing nation on the planet, with an annual output of 24 million tons.