Onion prices may resume fall in April, farmers seek export sops

Written by Sandip Das | New Delhi | Updated: Feb 14 2014, 11:02am hrs
Heavy arrivals of late kharif crop from key producing states such as Maharashtra, Rajasthan, Madhya Pradesh and Andhra Pradesh have in the last two months pulled down wholesale onion prices in key mandis to Rs 500-Rs 600 per quintal against Rs 3,000 per quintal that prevailed in October last year.

Traders from Nasik, the hub of India's onion trade, said there is anticipation of a bumper summer crop which would commence from April and that will pull down prices further.

At present, the prices are stable. However, they will fall further in April as a chunk of the summer crop will start arriving in mandis across key producing regions, a trader from Nasik told FE. Summer crop meets the domestic demand till June and July.

Farmers and traders from Maharashtra, the country's biggest producer of onion, have written to the commerce ministry, demanding export incentives so that excess stocks may be shipped.

The government must provide some export incentives to onion farmers, similar to what has been done in the case of sugarcane farmers, CB Holkar, board member, Nafed, and a farm leader from Nasik, said.

He added that supply has surpassed demand, leading to sharp fall in prices, because of widespread rain last monsoon in all key growing states and conducive weather conditions prevailing at present.

According to National Horticultural Research and Development Foundation (NHRDF) data, onion production in the current year, 2013-14, will be close to 19 million tonne (mt) against 16.6 mt reported in the previous year.

Meanwhile, exports of onion picked up in December last year as more than 1.33 lakh tonne of the key vegetable was exported against 66,236 tonne reported in the previous month.

A senior official with the food ministry said the government will intervene to ensure price stability and adequate domestic availability of onions along with price protection for balancing the interests of both farmers and consumers.

At present there is stability in prices and we are constantly monitoring the supply situation, RP Gupta, managing director, NHRDF, said.

In December last year, the government revised the minimum export price (MEP) of onion to $150 a tonne within three weeks of arrival of kharif crop into various mandis.

The domestic retail prices of onion rose to as high as R80 a kg during September and October last year. However, with improvement in supply, domestic prices have since fallen to R15-R20 a kg in major cities.

The total value of onion exports during April-December 2013 was more than R2,532 crore (9.8 lakh tonne in volume). India, the second-largest onion producer in the world, shipped 1.8 mt of the key vegetable worth R2,294 crore during 2012-13.