Up 40 pct, PM Narendra Modi govt fails to stop soaring onion prices despite minimum export cap

Written by PTI | New Delhi | Updated: Jul 1 2014, 00:57am hrs
Onion pricesOnion prices have shot up in the last two weeks to Rs 18.50 per kg at Lasalgaon, the country's largest wholesale market for the edible bulb.
Onion prices have shot up 40 per cent in the last two weeks to Rs 18.50 per kg at Lasalgaon, the country's largest wholesale market for the edible bulb, despite the imposition of minimum export price on the vegetable to check its domestic rates from going up by the PM Narendra Modi govt.

Prices have increased due to speculation amid anticipation of weak monsoon affecting Kharif (summer-sown) crops, National Horticultural Research and Development Foundation (NHRDF) Director R P Gupta said.

The impact of rise in onion prices at Lasalgaon in Nashik is being felt at Delhi's Azadpur market where they are ruling at Rs 15-25 per kg depending upon the quality, traders said.

Average rate of onions at Lasalgaon have soared to Rs 18.50 per kg from Rs 13.25 per kg on June 18, as per NHRDF.

On June 17, the Narendra Modi's govt had imposed a minimum export price (MEP) of USD 300 per tonne on onion to curb overseas sales and control rising retail prices.

In last one month, prices have jumped by 90 per cent to Rs 18.50 per kg as against Rs 9.75 per kg on May 30.

"Onion prices have gone up purely on anticipation of drought as there has not been any decline in the supplies," Gupta said.

About 39 lakh tonnes of rabi onion is stored in the country but that may not be sufficient if Kharif crop gets affected on account of deficient monsoon, he added.

The Met department has predicted a below normal monsoon this year, posing threat to Kharif crops including rice. Monsoon rains are key for the farm sector as about 40 per of agriculture land is irrigated through rain water.

The domestic demand during the lean period from June to November is met through stored rabi (winter) crops and fresh kharif (summer) crops.

Onion production is estimated to have risen to 192 lakh tonne during 2013-14 crop year (July-June), from 168 lakh tonne in 2012-13. Exports meanwhile fell to 13.58 lakh tonnes last fiscal from 18.22 lakh tonnes in 2012-13.

Onion is predominantly a rabi crop grown throughout India. During the kharif season it is grown mainly in Maharashtra, Karnataka, Gujarat and Andhra Pradesh.

Centre to ask states to check onion hoarding at retail level

The Centre will ask state governments to take action against retailers hoarding onion stocks after it found a huge gap between wholesale and retail prices, a top Consumer Affairs Ministry official said today.

Unsatisfied with steps taken by the states so far to crack down on hoarders, the ministry will write a fresh letter asking them to take stern action against hoarding at the retail and wholesale levels.

In the national capital, onions are retailing for Rs 25-30 a kg, while the wholesale price is about Rs 18 a kg.

Noting the huge gap between wholesale and retail prices of onions, Consumer Affairs Secretary Keshav Desiraju said: "There is no reason for price rise because stocks are abundant. There should not be any problem in supply. The wholesale prices are low."

"We are aware of that onion price increase is happening at the retail level," he said.

State governments have been asked several times to crack down on hoarding and black-marketing at the retail level and will be asked again, he said.

To check hoarding, Desiraju said three states -- Chattisgarh, West Bengal and Delhi -- have sought the central government's permission to impose a stock control order on onion traders.

"This issue is under examination and very soon the order will be issued. However, there is nothing to prevent them from taking action and seeking central government concurrence later. It is acceptable to us," he said.

According to sources, over 35,000 raids have been conducted against hoarders, mostly in Gujarat and Tamil Nadu, and 6,223 people have been arrested since January.

Onion prices are on rise amid the possibility of a below-normal monsoon even though supplies are sufficient in the wake of last year's good crop.