Agriculture minister Sharad Pawar said on Wednesday he was not in favour of banning onion exports, and called the current spurt in prices of the politically-sensitive commodity a ‘temporary’ phenomenon.
Wholesale prices of onion in Lasalgaon, the top trading centre in largest producer Maharashtra, have jumped 73% since June while prices in Delhi have surged nearly 140% during this period, sparking fears of a potential backlash by both consumers as well as the opposition parties. This has prompted the ministries of consumer affairs and commerce to mull a ban on onion exports to boost domestic supplies, especially in view of a 5% drop in onion production to 16.65 million tonne in 2012-13.
“It is a temporary situation. Heavy rains in key producing states have affected supplies. Rains have impacted crops as well as transport and logistics,” Pawar said. While wholesale onion prices have risen by 140% in Delhi since June, retail prices have jumped 250%, making a dent in the consumer's wallet. Significantly, onion exports hit 5,11,616 tonne in the first quarter through June, marginally lower than 5,17,274 tonne a year before.
“It is not fair to ban export of any agricultural commodity... India has established its position as a major supplier of agricultural items in the global market. If we ban exports, this image will be affected. So, we are against an export ban on onion,” Pawar said at an event organised by the Confederation Of Indian Industry.
The country's farm exports rose 25.3% to R2,33,000 crore in 2012-13, thanks to unrestricted shipments of several items, including grains, guargum and onion.
Spiralling onion prices were cited as a key reason for the defeat of the BJP in Delhi assembly elections in 1998, and the kitchen bulb has been a politically sensitive item ever since for its wide consumption. India had last banned onion exports in 2011 after prices more than doubled in just one month.
Onion prices are likely to be high until October, when the new crop is expected to hit the market. Although production is expected to be normal in 2013-14, lower harvests in states such as Tamil Nadu has put