To check onion price,govt shackles exports

The government has fixed a minimum export price of Rs 39/kg for onion to increase the vegetable’s availability in the domestic market.

Written by ENS Economic Bureau | New Delhi | Published:August 15, 2013 1:34 am

The government has fixed a minimum export price of Rs 39/kg for onion to increase the vegetable’s availability in the domestic market. The recommendation,made by an inter-ministerial panel of officers,was signed into an order by commerce minister Anand Sharma on Wednesday.

The committee of secretaries,which met on Wednesday,also proposed that the “quarantine condition for import of onion should be streamlined”. The government expects the easing of import rules to ensure stronger supplies in the market.

“We have suggested that the states should start de-hoarding operations to check supply constraints while it has also been proposed that there should be a minimum export price for onion,” an official told The Indian Express. Cabinet secretary Ajit Kumar Seth reviewed the availability of onion with the secretaries of commerce,consumer affairs,agriculture and food processing ministries to ensure there were no supply disruptions in markets across the country.

Meanwhile,India’s largest agro product marketing company will import onion from other countries at “best rates”. NAFED will also procure 4 to 5 tonnes of onion per day from Rajasthan directly through farmers and APMCs,and supply it through its retail outlets and mobile vans in Delhi. NAFED will also undertake wholesale auction of the stock through Delhi’s Azadpur APMC (agricultural produce marketing committee).

By imposing the benchmark price below which the commodity cannot be exported,the government has avoided imposing a ban that would have been interpreted negatively in international markets. India exports less than one million tonnes out of its total annual production of 17 million tonnes. The government had in early 2011 mulled a similar MEP,but had ultimately decided on a ban despite opposition by the agriculture and consumer affairs ministries. Domestic onion prices are currently above Rs 50 per kg in retail outlets like Mother Dairy’s Safal. However,in Nasik,the hub of the country’s wholesale onion trade,the price on Wednesday had softened to Rs 45 per kg.

Maharashtra,Andhra Pradesh,Karnataka,Rajasthan and Madhya Pradesh are the key onion producing states. The last spike in onion prices came in December 2010,when prices reached Rs 80-95 per kg,triggering the ban on its export. Traders on Wednesday ruled out any sharp fall in onion prices until the middle of September,when a bumper crop from Karnataka enters the market. Prices are expected to begin cooling in the first week of September once supplies from Andhra Pradesh rise.

Food minister KV Thomas said,“In the last two days prices have gone up and production has slightly come down and no export is taking place because prices in India are much more than the price outside.”

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