Exports duty to make Indian exports less competitive
Onion prices jump 20 in India in a month
New season crop could get hit by erratic weather

MUMBAI, Aug 19 Reuters India will impose with immediate effect a 40 export duty on onions up to Dec. 31 in an attempt to improve domestic availability of the vegetable, the ministry of finance said in a notification on Saturday.

The duty imposed by the world39;s biggest exporter of onions will help New Delhi dampen local prices ahead of key state elections later this year but will force Asian buyers to shell out more, as other regional exporters have limited supplies.

The export duty will make Indian onions more expensive than those from Pakistan, China, and Egypt. This will naturally lead to lower exports and aid in reducing local prices, said Ajit Shah, an exporter based in Mumbai.

Average wholesale onion price in key markets has jumped nearly 20 from July to August, to 2,400 rupees 28.87 per 100 kg on concerns that erratic rainfall would lead to lower yields.

India is heading for its driest August in more than a century, with scant rainfall likely to persist across large areas, partly because of the El Niño weather pattern, two weather department officials told Reuters on Friday.

Onions harvested during the summer months are rotting quickly, and the new supplies are being delayed. This situation has prompted the government to take precautionary measures, said another Mumbaibased exporter.

India39;s onion exports in…