Imported onion arrivals bring down wholesale prices, lead to concern among farmers, traders

Written by Nanda Kasabe | Pune | Updated: Aug 23 2014, 08:15am hrs
The first lot of imported onions that have arrived in the Lasalgaon wholesale market does not seem to have enthused either traders or buyers. Around 50 truckloads of onions that have arrived at the market from Egypt are being seen with concern by both farmers as well as traders with wholesale prices dropping to R17 per kg.

Wholesale prices of onions were around R25 per kg a month ago and with fears expressed in several quarters that retail prices to shoot up to R100 per kg by October, the Centre stepped in to take measures and even opting for imports, traders said. The government had asked National Agricultural Cooperative Marketing Federation of India to import 70,000 tonne, senior officials said. The imports have happened at a time when prices have stabilised to an extent and any further fall in prices is worrying farmers, market committee officials said.

Sohanlal Bhandari, president, All Nashik District Onion Traders Association, said the quality of onions that have arrived from Egypt is not very good and may not be popular with Indian consumers. Indian onions are pungent and overseas onions are sweet and therefore may not be popular, he said. Another 50 containers are expected to arrive later, he added.

There has been a major hue and cry over a possible price rise and now there are no buyers for onions with the commodity coming in from all quarters, he said. Traders, who were hoping that the prices would be about R30-35 per kg, had placed import orders in June.Around 40 containers of onions imported by private traders have arrived in Mumbai from Egypt and China.

The Centre had started the process to import 70,000 tons of onions from Pakistan, Iran, Egypt and China to meet the crop's scarcity in the next couple of months. The hailstorm in February and March this year and the delayed monsoon have played havoc with onion production and the government expected a scarcity to build up by September. Around 40,000 tons of onions are to be imported from Pakistan alone, while 10,000 tons each from China, Egypt and Iran will be imported. The delivery of imported onions on Mumbai port was expected in the second half of August.Traders said that they have been forced to take the onions because of government directives.

On July 2, the central government hiked a minimum export price (MEP) from $300 to $500 per tonne to increase its supply in the domestic market and curb overseas sales to check rising prices. The MEP, which is the rate below which no exports are allowed, had been re-introduced three months after the previous government had abolished it on March 4.

Traders as well as market committee officials said that they should not be held responsible for the price rise. There is a misconception among consumers that the price rise has been happening inside APMCs which is not the case, Nanasaheb Patil, chairman, Lasalgaon APMC said.

The production cost of onions for the farmers is much higher than the current onion prices. The recorded official loss of onions in Maharashtra due to the hailstorm is 42%. In addition to this, it is also a recorded fact that 35% of the crop in storage gets damaged due to rotting, he said. Although Maharashtra said onions and potatoes will not be included under the Essential Commodities Act, the Centre's directives have to be followed, he said.