To check rise in onion prices, govt may ban its export

Oct 22 2013, 18:59 IST
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Retail prices of onion are hovering in the range of Rs 60-80 in most towns and cities Retail prices of onion are hovering in the range of Rs 60-80 in most towns and cities
SummaryUnseasonal rains in key producing states have driven up prices, now sold at Rs. 60-80 retail.

The government is mulling banning Onion exports to contain prices, which have risen back to the Rs 80-90/kg level in the national capital owing to supply crunch.

Consumers in many parts of the country have been affected by the rise in onion prices. In major cities, onion is being sold at Rs 60-80 per kg in retail markets.

The domestic availability of onion has been affected on account of damage to kharif crop because of unseasonal rains in key producing states including Maharashtra.

"Onion prices have gone up sharply. We are considering banning exports as there is not much scope to raise minimum export price (MEP)," a senior government official said.

Although exports have shown a decline after recent hike in the MEP, prices remain high as supply crunch has intensified with some damage to kharif crop due to unseasonal rains in key growing states, the official added.

The sharp rise in onion prices, after being stable at Rs 60/kg for some time, has forced the government to consider suspension of overseas sale of onions. A ministry level meeting has been scheduled on Tuesday to discuss this issue.

Onion crisis is continuing from last three months. The government has taken several measures to check price rises but to no avail. It had slapped in August the MEP of USD 650 per tonne, which was later hiked to USD 900/tonne in September.

Due to curbs, onion exports fell by 28 per cent to 7,16,246 tonnes in the first six months of the current fiscal.

The government was expecting prices to fall sharply this month onwards on huge arrival of kharif crop but untimely rains have affected the crop and delayed the harvesting.

When contacted, Nashik-based government research body NHRDF Director R P Gupta said, "The kharif crop has got affected due to untimely rains in Maharashtra, Andhra Pradesh and Karnataka."

Currently, onion supplies are less than 50 per cent of the country's monthly estimated total demand of 9-10 lakh tonnes. The stored onions have also got exhausted now, adding to the price volatility. India produced 16.3 million tonnes of onion in 2012.

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