A day after the central government floated tenders for import of 2,000 metric tonnes (MT) of onions, prices of the bulb recorded a sharp drop on Wednesday with the average traded price standing at Rs 2,651 per quintal. Further price drop is expected as the effects of increased Minimum Export Price (MEP) and arrival of imported onions are set to kick in the market.
Since June, onion prices had seen a steady rise with the wholesale market at Lasalgaon in Nashik recording average trade price of over Rs 3,000 per quintal. Drought in Karnataka and the late arrival of the kharif crop in Maharashtra were cited as the causes for the price rise. The stored rabi onion was feeding the market with Maharashtra being the only state with ample storage of onions. Onions from Maharashtra were feeding the markets and subsequently prices had crossed the Rs 3,500 per quintal mark in the wholesale markets. Retail prices had touched Rs 80 per kg.
MEP and imports follow indirect tactics adopted by the government for the last two months to control onion prices. Income tax raids were conducted on traders in Nashik to look for stored onions. Reports had come in of traders being threatened by officials from the Ministry of Consumer Affairs to not raise the price in the wholesale markets. Talk of the possible raising of MEP and imports has been doing the rounds since September with traders terming this as sentiment doctoring to get the prices down. MEP has been zero since December 24, 2015 to boost exports and reduce the then glut in the market. Besides imposing an MEP of $850 per tonne, the central government has also floated tenders for importing 2,000 MT of onions. Both these moves, the government hopes, will bring down the onion prices in retail markets.
This has not gone down well with the farmers. Santosh Goarde, an onion grower from the village in Talki in Niphad taluka of Nashik, said the government’s move comes at a time when growers are being hounded by the power distribution companies to pay up their bills or face disconnection.
“The discom is demanding one time payment at a time farmers have no ready cash. When the prices were just getting right offsetting the losses of the last 18 months, the government took steps to stop it,” he said. Deepak Chavan, an agro commodity analyst felt the crop has had its top run and prices will taper off slowly. “Post December 15, the arrival of fresh onion will pick up momentum and prices will drop further,” he said.