Monsoon deficiency in Maha, K?taka behind shortfall
Onion prices are expected to rise sharply over the next few weeks. Monsoon deficiency in Maharashtra and Karnataka, which led to delay in Kharif sowing, is being cited as the primary reason.
The fast depletion of summer stocks and chances of lower Kharif output are likley to push up prices.
A trader from Nashik, the hub of onion trade, told FE that wholesale prices may rise to R1,500 per quintal by the next month from the current R900. ?Reports suggest that there has been a substantial decline in kharif sowing in Maharashtra and Karnataka and that supplies from the Kharif output would only enter the market by the end of November or early December,? said CB Holkar, board member, National Agricultural Cooperative Marketing Federation of India (Nafed).
The department of consumer affairs data indicate that onion prcies haven?t been very volatile in the last few months. The retail prices in key metros have been in the range of 14-18 a kg. In May, the government lifted its ban on onion exports, mainly due to a bumper summer crop. India has been exporting about 1 lakh tonne of onions a month since June. Subsequently, the government suspended the Minimum Export Price (MEP) regime for onion exports. ?If there is an alarming rise in the prices, we will hike the MEP to discourage exports,? said a commerce ministry official.
The government wants to avoid a reoccurrence of the situation in 2010 when there was a huge jump in onion prices, forcing it to import the commodity from Pakistan. The rise in onion prices also pushed up food inflation last year. ?We are taking a cautious approach,? said a commerce ministry official.
India, the second-largest onion producer in the world, shipped 1.5 million tonne during 2011-12, with a realisation of R1,714 crore. During 2010-11, India exported onions worth R2,159 crore. India exports onions to Sri Lanka, Bangladesh, Russia, Europe, Mauritius, China, Singapore and the Gulf.
The production during 2011-12 (July-June) is estimated at 15.13 million tonne. Maharashtra accounts for over 40% of the country?s onion output. Other key producers are Karnataka, Tamil Nadu and Gujarat.