Commodities

Onion plunges as arrivals continue unabated

M. R. Subramani Chennai | Updated on January 13, 2012 Published on January 13, 2012

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Onion prices plunged further this week as arrivals continued to swamp markets around growing areas in Maharashtra and Gujarat. The drop is despite the Centre cutting the minimum export price (MEP) of onion to $150 a tonne on Wednesday from $250 fixed on November 28.

“Arrivals are flooding all Agricultural Produce Marketing Committee (APMC) yards in Maharashtra. In the last three days, 40,000 tonnes of onions have arrived,” said Mr Rupesh Jaju, Director of Nashik-based United Pacific Agro Pvt Ltd.

While quality onions fetched Rs 470 a quintal on an average, inferior ones fetched Rs 178. The modal price or the rate at which most trades took place was Rs 355.

In Pune APMC, the modal price was Rs 375.

According to Mr Jaju, arrivals were the highest in Solapur APMC at 10,000 tonnes, while 6,000 tonnes each arrived at Pimpalgaon and Lasalgaom APMCs.

“Nashik, Pune and Ahmednagar districts are flooded with onions. The demand is lower than the deluge of supply,” he said.

The problem is that the red-coloured onions arriving from kharif and late kharif crops cannot be stored. “They have to be shipped immediately,” said Mr Jaju.

On the other hand, countries such as Malaysia, Singapore, Indonesia and Bangladesh have ample stocks. It is the main reason why prices have not gained despite a lower MEP. The Centre had come up with the MEP in September after farmers and traders boycotted markets in protest against a ban on exports after onion prices ruled at over Rs 1,000 a quintal. The ban was lifted in a fortnight and the MEP has since been revised down from $450 a tonne.

“Prices could rule low for the next one month. We cannot predict what will happen afterwards, especially with regard to summer crop,” said Mr Jaju.

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Published on January 13, 2012
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