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With prices of onion likely to remain stubborn till mid-October when the Kharif crop arrives at markets across India, the Centre is mulling an increase in the minimum export price (MEP) of the bulb.
The inter-ministerial committee on onions, that comprises officials from the ministries and departments of agriculture, consumer affairs and commerce and representatives from farmers’ cooperative Nafed, will meet on Thursday to see if there is a case for further increase in the MEP.
MEP is the price below which exports are not allowed.
MMTC tender The step follows a directive to MMTC Ltd to float a tender to import 10,000 tonnes of onions to increase domestic availability on Wednesday.
A tender floated by the National Agricultural Cooperative Marketing Federation (Nafed) earlier for the same quantity received no bids.
“Although the country exports not more than 5 per cent of onions that is produced and exports have actually gone down last month because of low international prices, raising the MEP has a signalling effect on domestic prices which are expected to fall,” a government official told BusinessLine .
Prices soar Wholesale prices in Maharashtra, the country’s largest producer, touched ₹4,500/quintal on Wednesday at Lasalgaon, near two-year high. Onions are retailing on average at ₹61/kg in New Delhi, up 103 per cent from a year ago when it was sold at ₹30.
“Wholesale prices of onion in Lasalgaon market during August increased by around 159 per cent compared to previous month and around 117 per cent compared to August 18 last year,” said a National Horticultural Research and Development Foundation (NHRDF) report released on Tuesday.
The Government had increased the MEP for onions last month to $425 a tonne for all varieties from $250 (₹16,000), following the increase in wholesale prices to ₹16/kg in June from ₹12 in May.
While onion prices fell immediately following the increase in MEP, they subsequently rose and have been increasing ever since.
Kharif arrivals While fresh arrivals of the early-kharif crop have begun hitting markets in southern India according to the report, it is unlikely to help consumers feeling the pinch over the last two months, since it accounts for 5-6 per cent of total kharif production.
“We hope that these take some heat off the prices but are not sure since the early-kharif crop is a small quantity. To some extent it may impact prices in southern markets but it’s unlikely to help lower prices elsewhere,” RP Gupta, Director, NHRDF, said.
Sowing, acreage The NHRDF estimates that sowing is completed across most areas although expects lower coverage in Maharashtra and Madhya Pradesh.
“Sowing has been completed across most of the growing regions but there’s been no rain in many of these areas. As of now, we cannot provide a precise sowing estimate,” said Gupta.
Area under the crop in 2014-15 is estimated at 11.81 lakh hectares while production is expected to be 18.92 million tonnes.
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