Onion prices in the wholesale markets have declined 50% following the ban on onion exports imposed a fortnight ago and the start of kharif crop arrivals, according to traders.
At the Lasalgaon market in Nashik, the hub of onion trade in the country, the kitchen staple is being purchased from farmers at Rs 1,500/quintal, down from the Rs 3,000/quintal price that prevailed on December 7, when the ban on shipment was announced.
Since the onion kharif harvest cannot be stored due to its high moisture content, arrivals are increasing, thereby pulling down the prices. Farmers and traders have been demanding that the ban on exports be lifted so that prices do not plummet.
Kharif crops arrivals have commenced in Maharashtra, Madhya Pradesh, Rajasthan and Karnataka, which have a major share in onion output.
According to the department of consumer affairs, the modal retail prices of onion declined 33% to Rs 40/kg on Thursday from Rs 60/kg on December 8, when the export ban was announced.
Retail onion inflation rose by a steep 86.46% in November as retail prices in several cities touched Rs 90/kg, following delayed arrival of kharif crop and unseasonal rain impacting the crops in Maharashtra and Karnataka.
In October, to discourage exports and improve domestic supply, the government had imposed a minimum export price (MEP) for onion at $800/tonne, which translates into Rs 67/kg. “Despite imposition of MEP, around 0.1 million tonne (MT) of the kitchen staple was being exported every month due to the global situation and delayed arrival of kharif crop,” an official said, citing the rationale for imposing a ban on onion exports.
The government had imposed a 40% export duty on onions in August, when inflation in onion — in the negative zone since September 2021 — rose to 23.18%.
During April-September of the current fiscal, India has exported 1.31 million tonne (MT) of onion, mostly to Bangladesh, Malaysia, United Arab Emirates, Sri Lanka and Nepal. India exported a record 2.5 MT of onion in 2022-23, which is an increase of 65% from the previous fiscal.
Agencies such as National Cooperative Consumer Federation (NCCF) and farmers’ cooperative Nafed are currently selling onion from the buffer stock at a highly subsidised rate of Rs 25/kg to consumers in various towns. In the current year, the government had directed NCCF and NAFED to procure 0.7 MT of onion for the buffer. At present, around 0.5 MT has been procured, and procurement of the rest is ongoing.
