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Export controls dent domestic onion price

Export controls dent domestic onion price
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First Published: Fri, Apr 27 2007. 12 27 AM IST
Updated: Fri, Apr 27 2007. 12 27 AM IST
Mumbai: Onion prices, which had shot up sharply a few months back, have now tumbled on increased arrivals and exports controls by the government, officials and exporters said. “Farmers in all onion-producing states are busy harvesting. Market arrivals increased substantially and prices are falling,” C.B. Holkar, vice-chairman of National Agricultural Co-operative Marketing Federation of India (Nafed), said on 26 April.
Wholesale prices in India’s largest onion-trading hub, Lasalgaon in Maharashtra, have eased to Rs400 a quintal, from Rs1,500 in February. Retail prices have fallen from a peak of Rs25 a kg to about Rs8 in Mumbai. “The minimum export price (MEP) is too high and export is impeded at this price,” Holkar said.
Onion prices in India had shot up in early 2007 on lower arrivals and booming export demand from neighbouring countries. To cool domestic prices and discourage exports, the government had increased MEP to $345 (Rs15,180 then) per tonne in February for West Asian countries. However, for April, it fixed the MEP at $305. But there are few buyers even at this reduced price due to arrivals from other major onion-producing countries, such as Pakistan and China. “The MEP is not competitive when we compare it with neighbouring countries. The government should slash it by at least $50,” Ajit Shah, a Mumbai-based onion exporter, said.
“The MEP is almost double than the domestic wholesale prices. Probably it would be slashed for May,” Holkar said. “If the MEP is not reduced, prices will fall further on increased arrivals,” he added.
“There is still good demand for Indian onions if we reduce the MEP,” Shah said.
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First Published: Fri, Apr 27 2007. 12 27 AM IST
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