Under fire from opposition parties for the steep rise in prices of essential commodities, the government has deferred the decision to reduce the minimum export prices (MEP) of onion for March. The government has increased the MEP during the last few months for ensuring domestic supplies.
Exporters have been demanding the reduction of minimum export prices as domestic retail prices have started to decline across cities with the wholesale prices at Nashik, the hub of onion production, dipping from Rs 1,500 ? Rs 1,600 per quintal prevailing a month back to Rs 500 ? 550 per quintal on Tuesday.
A trader from Nashik said the prices of onion are expected to come down further on arrival of late kharif in the mandis across the country. For March, exporters have demanded that MEP be reduced to $275 per tonne from $ 500 per tonne decided for February.
Sources told FE in a meeting at National Agricultural Co-operative Marketing Federation (Nafed) on Friday last week, the key agency for onion exports, could not decide on mep for the month of March 2010. No export can take place below the MEP and all contracts are registered with the Nafed. The country exported 77,000 tonne of onion in December 2009 against 1.02 lakh tonne during the same month last year.
For augmenting domestic supplies, the government had raised MEP for onion by $50 to an average of $ 500-505 a tonne for January and continued with the same rate for February. In November 2009, Nafed, had significantly hiked minimum export price by around $ 140 per tonne to an average $445- $ 450 tonne for augmenting domestic supplies.
According to an FE analysis, retail prices of onion in Delhi have declined to Rs 20 per kg on Tuesday from Rs 24 per kg prevailed two months back. The decrease in prices have been significant in Chennai and Hyderabad where retail prices have gone down to Rs 14 per kg and Rs 13 per kg respectively on Tuesday from Rs 26 and Rs 21 reported in early January 2010.
The National Horticulture Research and Development Foundation (NHRDF) in its crop prospect report has said the markets across the country were getting late kharif crop and would continue till next one month. Rabi onion harvesting will start from end of March and continue till May 2010 in almost all the states. ?Wholesale prices are expected to decline further during next one month,? CB Holkar, president, NHRDF, said. Onion from the southern part of the country is exported mainly to Sri Lanka, Malaysia and Singapore, while that from Nashik is sent mostly to Gulf countries.