Despite reports of sharp fall in onion prices across key mandis, the government is taking a cautious approach, with no immediate pan to lift the ban on exports of the key vegetable imposed last month.
Official sources told FE that there was an assessment of onion supply situation in the country recently, there was consensus that revoking onion exports ban may not be feasible at current circumstances.
‘We are assessing the onion supply situation and prices closely,” an official said. With the arrivals of kharif harvest, the mandi prices at Lasalgaon, Nasik, Maharashtra, the hub of the country’s wholesale trade has fallen to a range of Rs 1500 – Rs 1800/quintal on Thursday from around Rs 3700 – Rs 4000/quintal prevailed prior to the imposition of shipment ban announced on December 7 till March 31, 2024.
In other key onion producing districts of Pune, Ahemadnagar and Solapur, mandis prices are currently ruling around Rs 1800 – Rs 1900/quintal. A trader said that onion kharif harvest due to high moisture content cant be stored, the arrivals are increasing thus pulling down the prices. Farmers and traders have been demanding a lifting ban on exports so that prices do not plummet.
“The mandi prices have fallen sharply and the current prices are below the cost of production for the farmers,” Balasaheb Misal, former director, Manmard (Maharashtra) mandi board and an onion farmer, said
According to the department, the modal retail prices of onion declined by 33% to Rs 40/kg on Thursday from Rs 60/kg on December 8 when ban on export was announced.
Retail onion inflation rose by a steep 86.46% in November as retail prices in several cities touched Rs 90/kg last month because of delay in arrival of kharif crops and unseasonal rains impacting the crops in Maharashtra and Karnataka. Inflation in onion, which had been in the negative zone since September, 2021, rose to 23.18% in August. In February, 2020, onion inflation rose to 140% on year.
The government agencies – farmers’ cooperative Nafed and National Cooperative Consumers Federation of India (NCCF) has procured 20,000 tonne of kharif onions so far against a target of 0.2 million tonne (MT) following the government’s decision to increase buffer stock target t 0.7 million tonn from 0.5 MT for the current fiscal.
NCCF and Nafed are currently selling onion from the buffer stock at a highly subsidised rate of Rs 25/kg to consumers in various towns. In October, to discourage exports and improve domestic supplies, the government had imposed a minimum export price (MEP) for onion at $ 800/tonne which translates into Rs 67/kg.
The government had imposed a 40% export duty on onions in August. The export ban was the first intervention in onion exports since January, 2021. The government has not imposed a ban on onion exports since 2021 which was the norm a few years back.
The estimated production of onion during the 2022-23 crop year (July-June) is around 31.8 MT against 31.7 MT reported in the previous year.