Commodities

Onion tumbles on heavy inflow

Our Bureau Chennai | Updated on March 11, 2011

ONION

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Onion prices continued their southward journey as heavy arrivals offset the Centre's decision to lower the minimum price for export to $350 a tonne on Thursday.

“There is pickup in demand and regular movement of cargo. But heavy arrivals are pinning prices down,” said Mr Madan Prakash, Director of Chennai-based Rajathi Group that exports onions.

On Friday, the modal price or rates at which most trades took place dropped to Rs 375 a quintal from Rs 570 last week at Lasalgaon, Asia's biggest market for the bulb. Prices fetched by quality onions, too, dropped to Rs 500 from Rs 650.

Arrivals continued to flood the markets with 2,364 tonnes hitting Lasalgaon on Friday. Inflow into Lasalgaon throughout this week was over 1,500 tonnes. In nearby Pimpalgaon, arrivals topped 3,000 tonnes on Monday, while in Pune inflows were above 2,000 tonnes this week.

“The prices trend is likely continue at these levels in view of heavy arrivals,” said Mr Prakash.

Export enquiries are coming in from Malaysia, Sri Lanka and Indonesia. “Some exports are taking place to Indonesia and Colombo. We also expect the Philippines to come to the market sometime after May,” said Mr Prakash.

However, one deterring factor is the difference between the price in the domestic market and minimum export price.

“Exporters are pointing out at the lower domestic price and seeking lower price,” a trading source said.

“We could find better export movement if the minimum export price is lowered to around $275-300,” said Mr Prakash.

Published on March 11, 2011

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