Minimum export price for onions soon

To check spiralling onion prices and maintain smooth supplies, the Centre on Wednesday decided to re-introduce a minimum export price for the essential commodity.

With onion cost at retail touching Rs 80 a kg in the national capital, the Centre swung into action by asking the National Agricultural Cooperative Marketing Federation (Nafed) to import onions and offer them at best rates for domestic consumption.

A meeting of the Committee of Secretaries (CoS), chaired by Cabinet Secretary Ajit Seth, reviewed situation of demand and supply of the bulb and gave directions to ensure adequate availability of onions at reasonable prices.

Meanwhile,  the Karnataka government said its intervention is not possible to control onion price rise.

On Wednesday, the onion prices touched Rs 70 per kilo in the retail market and Rs 55 per kilo in the wholesale yards in Bangalore.

The Union Agriculture Ministry also directed the Nafed to procure 4-5 MT onions per day directly from farmers and APMCs and supply the same through its retail outlets and mobile vans in Delhi.

The co-operative major will also procure onion at the best prevailing rates from wholesale markets at Lasalgaon and Pimpalgaon in Maharashtra and make it available to state marketing federations after imposing a nominal service charge of twp per cent.

On the advice of the CoS, the Commerce Ministry re-introduced a minimum export price (MEP) on onions and pegged it at $650. The government had scrapped the MEP mechanism in May last year.

However, the MEP mechanism could be seen as mere posturing by the government as India’s onion exports have been virtually nil due to high prices when compared with China and Pakistan.

Food and Consumer Affairs Minister K V Thomas said no export of onion was taking place because of the increased prices of the commodity and its low production in the country.

India has exported 6.39 lakh tonnes during April-July period this fiscal compared with 6.94 lakh tonnes during the same period last year. Onion production was 16.6 million tonnes in 2012-13.

At Lasalgaon, Asia’s largest wholesale market for onion, prices were at Rs 46 per kg, slightly higher than Tuesday.

Agriculture ministry officials said that prices of onions are usually high during this time of the year due to depleting stocks. Prices start decreasing in September when fresh supplies commence.

Reports from across the country said that onions were retailing in the range of Rs 60-80 per kg.

BJP activists staged protests outside the residence of Delhi Chief Minister Sheila Dikshit over the rising onion prices.

With most of the onion which arrives in the State being from Maharashtra, 85 to 90 per cent, Karnataka is dependent on the imported produce every year. The rest 10 to 15 per cent of the produce is from the arid districts of the State. This year, with large tracts of the dry areas in Karnataka, like Bijapur, Gulbarga and other areas receiving less than anticipated rainfall, onion prices have gone up.

At the other end, export of quality onions, mostly ‘Bangalore Small’ variety, have continued unabated.

When contacted by Deccan Herald, karnataka Horticulture Principal Secretary, Shankarlinge Gowda said: “Our (government) intervention is only possible when the prices fall below the Minimum Support Price (MSP), in favour of the farmers. In this case the prices have gone up in the open market. We cannot intervene in this scenario. we are however expecting that the prices will stabilise in a few days.”