Onion prices tumble on late kharif arrival

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SummaryMuch to the government’s relief, wholesale onion prices declined sharply on Friday in Nasik, the country’s trading hub of the key agricultural commodity.

Much to the government’s relief, wholesale onion prices declined sharply on Friday in Nasik, the country’s trading hub of the key agricultural commodity. Late kharif arrival from key onion-producing states of Maharashtra and Rajasthan into various mandis has been attributed to the decline in onion prices.

According to a trader from Nasik, the average wholesale onion price was around R1,000 per quintal on Friday, lower than the R1,800 per quintal reported two weeks back. Correspondingly, retail onion prices in the Delhi region have declined to R20-25 a kg from R30-35 a fortnight ago. “There has been improvement in the supply situation in the last few days,” a trader told FE.

Officials from the departments of consumer affairs, commerce and agriculture recently held a meeting with the Union cabinet secretary to discuss the spike in onion prices. The temporary rise was attributed to a fall in kharif production because of drought-like conditions in parts of Maharashtra, Rajasthan and Gujarat.

In 2011-12 (July-June), onion production was estimated at 15.13 million tonne. This year’s output is expected to decline by 15- 20% because of poor rainfall in Maharashtra, the state that accounts for more than 40% of the country’s onion output.

Despite a sharp spike in onion prices, the commerce ministry refused to impose a minimum export price (MEP) on exports to improve domestic supplies. The government lifted a ban on onion exports in May last year for boosting exports, an idea that stemmed from a bumper summer crop. The country had been exporting about 1 lakh tonne of onion every month since June.

India, the second-largest onion producer in the world, had shipped 1.5 million tonne of the vegetable in 2011-12. The realisation from onion exports during 2011-12 was at R1,714 crore.

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