Onion prices tumble on late kharif arrival

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.