Onion prices improved this week as demand for exports picked up with the lowering of the minimum export price.

On Friday, onion prices at Lasalgaon, Asia's largest market for the vegetable, ruled between Rs 400 and Rs 670 a quintal. The modal price or rates at which most trades took place was Rs 520.

“Export demand helped prices increased Rs 100-150 a quintal this week,” said Mr Rupesh Jaju, Director of United Pacific Agro Pvt Ltd.

“We are getting good enquiries from Dubai and Malaysia,” said Mr Madan Prakash, Director of Rajathi Group of Companies that is into shipments of agricultural produce.

Export demand has picked up after the Centre on March 31 cut the floor price for onion exports to $175 a tonne from $225 a tonne. The minimum export price for onion exports has been cut four times after it was fixed at $600 a tonne when a ban on shipments was lifted in February.

The ban was imposed in December after onion prices surged to near Rs 100 a kg in retail outlets.

“The old crop is fetching around Rs 400 a quintal, while the new one between Rs 625 and Rs 640,” said Mr Jaju.

“Export demand is for pink onions that are arriving now from the rabi crop,” said Mr Prakash.

Prices improved this week despite huge arrivals, though in some markets the inflow sagged a bit.

Rabi crop arrivals are expected to peak in a fortnight but Mr Jaju said farmers may prefer to hold back their produce since these onions can be stored. Last year, growers had held back rabi onions and sold them when prices surged.

“A correction in prices is likely since there is no domestic demand,” said Mr Jaju.

Mr Prakash said prices were expected to drop particularly in view of rabi arrivals.

“Prices could correct by Rs 50-70 a quintal next week,” Mr Jaju said.

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