The state-run trading corporation had contracted imports of 2,000 tonnes of onion last month as it was asked to by the Centre after retail prices of the vegetable skyrocketed in August, but is unable to dispose of 1,600 tonnes of merchandise that came ashore at Mumbai’s JNPT even at a third of the landed price, reports Sandip Das in New Delhi. While onion prices have fallen locally since the import decision was taken, the lack of pungency of the onion imported from Egypt and China also caused MMTC’s consignment to go a-begging. The situation made a spectacle of the government’s customary knee-jerk reaction to the volatility in the domestic prices of farm commodities.
MMTC had imported onions at a price of Rs 45 per kg (landed cost). Sources told FE that the canalising agency is now offering the vegetable to bulk domestic buyers at Rs 15 a kg. “Not only that Egyptian and Chinese onions are bigger in size, they are also less pungent compared to Indian varieties,” a government official told FE. Besides, he said, as these onions have remained in the cargo area for the last many weeks, they may have started to decompose.
MMTC, the sources said, is offering imported onion on as-in-where-is basis to bulk buyers. “As kharif onions have already started to enter the market, there are not many takers for these imported varieties,” an official said. In the next few weeks huge quantities of onions from Maharashtra, Rajasthan and Madhya Pradesh are expected to arrive in the mandis, leading to a further fall in the retail price of the vegetable.
India imports many farm items including pulses and crude edible oils to meet the domestic shortfall in production. It also resorts to imports of items like wheat and onions whenever expediency demands it. But given the delay in decision-making and lack of sustained planning, the intended market corrections often get thwarted. “Consumers have very strong preference for fresh onions, which implies that a small variation in production results in disproportionately large variation in prices,” Ramesh Chand, member, Niti Aayog, said. Chand said that onion area and production has seen increased concentration in a few states like Maharashtra, Madhya Pradesh, Karnataka and Andhra Pradesh, which also adversely impact supply situations.
In the later part of August, the government had asked MMTC to import 10,000 tonnes of onions to increase domestic availability of the commodity as the prices started to rise sharply. Sources said that while MMTC floated tenders for import of 2,000 tonnes of onions in the first week of September and received the offers, it could get delivery of only 1,600 tonnes of the commodity.
Meanwhile, the government has decided to focus on increasing rabi production of onions especially in the eastern and northeastern states like Odisha, Bihar, Jharkhand and West Uttar Pradesh and Assam.
Of the annual onion production of close to 19 million tonnes in 2014-15, around 13 million tonnes were produced during rabi season. Out of total rabi output, which usually starts arriving in the market by March and April, 7-8 million tonnes are stored for distribution till October. “We are formalising a strategy to augment onion production in collaboration with the state governments in eastern and northeastern regions so that dependence on few states like Maharashtra, Andhra Pradesh and Karnataka for augmenting supplies will end,” an agriculture ministry official said.