Onion price hits 20-month high despite govt's measures

At Lasalgaon mandi, Asia’s largest onion selling market, the onion price jumped Rs 1.50 a kg to Rs 32 a kg, the highest since January last year.

Onion price hit the highest since January 2018 on Monday despite the government’s measures for boosting domestic supply.

At Lasalgaon mandi, Asia’s largest onion selling market, the onion price jumped Rs 1.50 a kg to Rs 32 a kg, the highest since January last year.

Onion price has more than doubled in the last one month, after moving in a narrow range of Rs 9-Rs 13 a kg in the previous three months, and further below between Rs 4 and Rs 9 a kg since February.

The Directorate General of Foreign Trade (DGFT), in a notification last Friday, had announced a minimum export price (MEP) for onion at $ 850 a tonne.

It also gave green light for import of 2,000 tonne of bulbs through nominated agencies.

With the Maharashtra Assembly election in a couple of months, such a sharp increase in the onion price may hurt consumers.

“The onion price is rising because of short supply because of less plantation by farmers following last year's low price.

"When onion prices fell to Rs 2 a kg last year, the government did not take any action to buy it at Rs 20 a kg.

"Farmers are no longer demanding anything from the government.

"The current price is driven by market forces and the government must accept it.

"By levying a minimum export price (MEP) and allowing import, the government is promoting foreign farmers,” said Diliprao Shankarrao Bankar, chairman, Agricultural Produce Market Committee (APMC), Pimpalgaon.

State-owned MMTC has already decided not to import onions from Pakistan amid the heightened tension over Jammu and Kashmir, but Afghanistan and China can export the item to India at the prevailing rate or higher.

Traders have termed “unwarranted” as the government’s decision on MEP and allowing import.

These steps were taken in a bid to put a check on the rising prices.

“The government’s action is uncalled for. Such an opportunity to earn some money comes for farmers once in three-four years.

"The government does not intervene when onion prices are below the cost of production.

"The new crop is coming to the market in a month.

"By the time the import consignment comes to the country, the new crop (domestic) would also hit the mandis.

"But, the announcement will definitely pull down the momentum,” said Jaydatta Sitaram Holkar, chairman, Agricultural Produce Market Committee (APMC), Lasalgaon.

Photograph: Amit Dave/Reuters