Onion remains stable, Nafed says no concerns over supply

Written by Sandip Das | New Delhi | Updated: May 26 2012, 06:03am hrs
Onion prices continue to be stable across the country, a trend mainly attributed to the bumper summer crop, which is expected to meet the domestic demand during the next couple of months.

Traders from Nasik, the hub of the country's onion trade, said the wholesale price of the commodity is ruling at around R450-500 a quintal, and is expected to get stable during the next few months.

Farmers in Maharashtra, the biggest producer of onion, have been bringing in produce to various markets in Nasik, besides holding on to the stocks.

There is no concern about the supplies of onion due to a bumper output, CB Holkar, board member, National Agricultural Cooperative Marketing Federation of India (Nafed) and a farmer leader from Nasik region told FE.

The department of consumer affairs data indicate that the prices of onion across the key metros have not been volatile during the last two months. There may be a marginal rise in onion prices during the next few months as farmers gradually release their stocks, a trader from Nasik said.

Nasik-based National Horticulture Research and Development Foundation (NHDRF), in its latest report, had said, The rabi onion production is expected to be more. Therefore, quantity of onion is likely to be stored more in comparison to last year. The report also indicated that the prices are expected to rise marginally because farmers and traders are expected to store the produce during the months of April-May.

Meanwhile, in April, India shipped more than 83,000 tonne of onion with a price realisation of R56 crore. During 2011-12, India exported 1.5 million tonne (mt) of onion worth Rs. 21,41 crore. Onion production was estimated at 15.13 mt last year, and Maharashtra contributed more than 40% of the countrys total produce.

In a high-level meeting earlier this month, attended by Prime Minister Manmohan Singh, agriculture minister Sharad Pawar, food minister KV Thomas and commerce minister Anand Sharma, the government had decided to abolish MEP for boosting exports.

The government had in February 2012 reduced the MEP of onion by $25 to $125 per tonne for giving a boost to exports. Thanks to excess production, the farmers had started to resort to distress selling, fearing the prices could plummet further. In January, the government cut the MEP to $150 from $250 per tonne due to slowing down of onion exports.