Onion prices have been ruling around Rs 100 a kg in retail for close to three months as excess unseasonal rainfall damaged the delicate crop across the country. On Thursday, medium quality onion was selling at Rs 25/kg in retail in Maharashtra. On Monday, wholesale prices fell to an average of Rs 23 a kg.
Traders said only strong government procurement operations can help tame a further fall in prices.
Earlier, the government had allowed import of 1.50 lakh tonnes, which was increased by another 2.50 lakh tonnes on December 19, 20119. The government has kept import of pulses open for only dal millers, who are the actual users of unprocessed pulses. The mills were asked to apply with the quantity they wanted to import till December 30.
The remark comes after South Indian Mills Association (SIMA) urged the textile minister to instruct CCI to sell the cotton at market price so that spinning mills can procure the cotton at a competitive rate. Mill owners have complained that the price of Rs 46,000 per candy (of 356 kg each) quoted by the CCI is too high.
Industry leader Sula reported no growth in overall sales for the first three quarters of the current fiscal. Despite extending various schemes to push sales, wineries could not succeed much in getting consumers during the festive season.
Only a substantial increase in domestic arrivals of the crop can help significantly ease onion prices in the local markets.
At a meeting called by the Directorate General of Foreign Trade, traders assured officials that fears of foreign pests and disease impacting domestic onion crops due to relaxed phytosanitary norms were unfounded.
According to traders, onion imports will be feasible till end of January.
Traders said they had not foreseen such an acute scarcity of onion, which happened mainly because of heavy rain. They said farmers were harvesting pre-mature onion to benefit from present high rates. Though onion prices are at their historic highs, it has barely helped many farmers recover past year's losses and get decent returns this year.
In October, 2.5 million quintal onions arrived in the markets, down from 5.1 million quintals last year.
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