The government decision to import around three lakh tonnes of onion for improving domestic supplies could adversely hit farmers’ income, a senior agriculture ministry government official said on Tuesday.
With the late kharif crop from Karnataka and Andhra Pradesh already beginning to arrive in various mandis across the country, onion prices have started to moderate after rising sharply in last two weeks.
?At this juncture, importing onion would certainly lead to a sharp fall in prices due to excess supply, which would definitely go against farmers’ interest,? the official told FE.
Karnataka and Andhra Pradesh produce around four million tonnes (mt) of onions in a year, while the country’s total annual output is estimated at 16.65 mt in 2012-13.
Onion prices, which witnessed a huge jump two weeks back to R5,000 a quintal, softened to R3,500 per quintal at Nasik, the hub of country’s wholesale trade in the key agricultural commodity.
Traders said that by mid September, supplies from Karnataka and Andhra Pradesh would go up, while the produce from Maharashtra, the country’s biggest onion producer, would enter the market by mid October.
?With supply situation likely to improve in the next two weeks, importing onion at this point of time would lead to excess supply, which may pull down the domestic price sharply. Farmers are going to be the ultimate losers if prices plummet in next few months,? the official said.
State-run PEC last week floated an expression of interest for identifying international suppliers for the import of 3 lakh tonnes of onion.
The PEC decided to import as global prices are ruling lower at present in the range of $ 450-550 a tonne as against the domestic price of $ 650 a tonne.
?The quality of our onions is unique thus in demand in many countries. The imported onions from countries such as Iran, China and Egypt would not be accepted by Indian consumers because of their quality,? CB Holkar, board member, Nafed, said.
According the ministry of consumer affairs data, retails onion prices have been prevailing in the range of R 53 ? R 50 a kg across most of the key metros.
A huge jump in onion prices have virtually halted exports of the key agricultural commodity as India imposed a minimum export price (MEP) of $ 650 a tonne against the prevailing global price of around $ 450 per tonne.
Official data said India exported 5.1 lakh tonne of onion valued at R 776.47 crore in first quarter of this fiscal against a slightly lower in during same period last year.
In 2012-13, the annual onion production was more than 15.5 million tonne (mt).
Maharashtra, Andhra Pradesh, Karnataka, Rajasthan and Madhya Pradesh are the key producers of the agricultural commodity.
India, the second-largest onion producer in the world, shipped 1.8 million tonne of key vegetable worth R2,294 crore in 2012-13.
