Centre may ban onion exports to curb price rise

The Centre is considering a ban on onion exports as part of its efforts to rein in surging prices.

“The Government is looking at such an option. We are not sure if the ban will come now or after the monsoon session of Parliament.

The Government will usually want to do such things when Parliament is not in session,” said a source who did not want to be identified.

The view gains credence on the heels of Food and Consumer Affairs Minister Ram Vilas Paswan writing to the Commerce Ministry to bar shipments from the country first before resorting to imports.

Paswan made the suggestion when his Ministry’s views were sought for importing one lakh tonnes of onion.

On-and-off ban However, Commerce Ministry sources said the Government is not considering banning exports at this moment. On the other hand, if the Centre decides to import onion, the machinery is in place and can start its work any time.

The Government has been banning export of onion on-and-off since 2010 to control soaring prices. A ban imposed in December 2010 was lifted in March 2011. Again, exports were banned in 2011 only for a brief while before being lifted following protest from farmers.

Last year, too, the Centre imposed ban on exports after retail prices surged to ₹100 a kg in retail outlets.

In addition, the Government has been resorting to fixing a minimum export price when onion rates begin to surge. After the Narendra Modi Government came to power, it initially fixed a minimum export price of $300 a tonne on June 17 before raising it to $500 on July 2.

Global favourite Onion prices have been surging over the last few weeks despite a record crop of 19.2 million tonnes, up 14 per cent from 2012-13. Despite the Government fixing a floor price for exports, shipments are taking place.

“There are many who prefer Indian onion for its pungency. West Asian, Singapore and Malaysian buyers prefer Indian onions. They had bought it even when the minimum export price was $1,110 a tonne,” said CB Holkar, a member of the National Agricultural Cooperative Marketing Federation and a grower. Currently, only Sri Lanka is not buying Indian onion since the local crop has arrived in the markets there. “When the local crop is harvested in Sri Lanka, the Government there does not allow imports,” he said.

“If a ban is imposed on exports, prices could drop by at least ₹100 a quintal,” said Holkar.

Prices soar Currently, the modal price or the rate at which most trades take place is ₹2,015 a quintal – up ₹15 over Wednesday – at Lasalgaon Agricultural Produce Marketing Committee (APMC) yard, Asia’s largest for onion, in Maharashtra.

Arrivals, on the other hand, are down to 850 tonnes from around 1,500 tonnes at the beginning of the month. Prices in Pimpalgaon APMC yard (₹1,900) and Pune (₹1,650) are lower than Lasalgaon but the quality of onion is reported to be inferior. “Prices are lower at Pimpalgaon and Pune because the quality of arrivals is not up to mark,” said RP Gupta, Director of National Horticultural and Research Development Foundation in Nashik.

“Prices are beginning to stabilise but we are not sure for how long they will hold,” said Holkar.“Arrivals have begun to drop since farmers are holding back their produce, expecting higher price,” said Gupta. “Farmers are hoping that prices will exceed ₹3,000 a quintal soon. So, they are holding back,” said Holkar.

Rainfall pattern With the monsoon beginning to spread across the country, Maharashtra has begin to receive rains.

Onion is sown initially over a small area before the seedling is transplanted on to a larger area like paddy. The rain is also having a psychological impact on the prices, trade sources said.

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