Crop arrival from MP, Rajasthan cools onion prices

Written by Sandip Das | New Delhi | Updated: Apr 3 2013, 07:42am hrs
The arrival of summer crop from Madhya Pradesh and Rajasthan has boosted onion supplies in the country even as several parts of Maharashtra, the biggest producer of the key agricultural commodity, face drought-like conditions. The arrivals have kept retail onion prices in check in the last few weeks as there were apprehensions that prices may rise because of the drought-like conditions in Maharashtra .

Traders from Nasik, the hub of onion trade, told FE that wholesale onion prices on Tuesday declined to R900 per quintal against R1,200 per quintal just two weeks ago.

They added that because of greater production in states that are not traditional producers, such as MP and Rajasthan, onion prices are expected to be stable during the next few months.

Onion prices are expected to be stable till August as farmers are expected to store the summer crop, which should meet domestic demand in the coming months,CB Holkar, board member, National Agricultural Cooperative Marketing Federation of India (Nafed), and a farm leader from Nasik, said.

In February, officials from the Department of Consumer Affairs, Commerce and Agriculture held a meeting with the Union Cabinet secretary to deliberate on the spike in onion prices. Retail onion prices had risen to around R40 a kg.

The recent temporary hike in onion prices was attributed to the decline in kharif production because of drought in parts of Maharashtra. But as supplies rose, retail onion prices declined to R20-25 a kg presently.

Meanwhile, commerce minister Anand Sharma had told the Rajya Sabha last month that the spurt in domestic prices was temporary and caused by unseasonal rains and mandi closures in Delhi. We have adequate stock. We have no shortage and position is as such comfortable, Sharma had said.

He had stated that only surplus production, after taking into account all of domestic consumption, is allowed to be exported. Domestic production of onion this year is estimated at 17 million tonne (mt), which exceeds domestic demand of about 15 mt.

For onion, the government has set up an inter-ministerial committee (IMG) comprising representatives from ministries of commerce, agriculture, Nafed and the Department of Consumer Affairs. The committee regularly takes stock of the arrival of onion and the modal prices prevailing in important production and consuming areas.

India, the second-largest onion producer in the world, had shipped 1.5 million tonne of the key vegetable during 2012-13. The realisation from onion exports during 2011-12 was R1,714 crore. During 2010-11, India exported onion worth R2,159 crore. India exports onions to Sri Lanka, Bangladesh, Russia, Europe, Mauritius, China, Singapore and Gulf countries.

The minimum export price (MEP) on onion was removed in June last year following a sharp drop in domestic prices.