The Indian government’s export agency, National Cooperative Exports Limited (NCEL), is buying 1,650 tonnes of onion at 29 rupees per kg from private traders for exporting to Bangladesh, according to Indian government sources.

This will be the first official onion export from India in more than three months since the country banned the exports in December last year.

In the first week of March, the central government allowed exports of 64,000 tonnes of onion to countries, including Bangladesh. The process could not happen because of some complexities in the selection of agencies.

Initially, the Bangladesh government wanted to purchase the bulb through government agencies, but the negotiation went through a rough patch as the prices offered by Indian agencies were too high.

India's ban on onion exports aimed at tempering rising domestic prices had triggered a crash in local prices, while the prices have shot up globally due to the non-availability of Indian onions. The demand from traditional buyers like Bangladesh, the Middle East, and some countries of Southeast Asia is at its peak during the ongoing Ramadan.

Recently exporters have written to the central government claiming that huge quantities of onions have been smuggled out since the export ban. This is one of the reasons for allowing exports through legal routes.

Currently, onion prices in the wholesale markets of Maharashtra’s Nashik Mandi are ranging between 7 rupees and 16 rupees per kg. Prices may go down further with the steady arrival of the fresh Rabi harvest.