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Hoarding in check, onions price move to a more comfort zone

With speculators out of picture with the govt taking steps to prevent hoarding, and ample supplies coming to the market, prices are expected to remain stable for at least 3-4 weeks.

, ET Bureau|
Last Updated: Aug 12, 2014, 04.28 AM IST
PUNE: Recent tenders floated by the National Agricultural Cooperative Marketing Federation of India (Nafed) to import onions have found lukewarm response, but the need to import the vegetable itself has probably eased, with its price moving to a more comfortable zone.

With speculators out of the picture with the government taking steps to prevent hoarding, and ample supplies coming to the market, prices are expected to remain stable for at least three-four weeks, say traders. The price at Nashik’s Lasalgaon wholesale market, India’s largest for onions, averaged Rs 16 a kilogram this month, compared with Rs 37 this time last year.

In the retail market, onions are selling for Rs 20-30 a kg. To improve local supplies and rein in prices by preventing hoarding, the government had in July imposed stockholding limits on onions and potatoes.

The Centre also increased the minimum price for onion exports to $500 a tonne form $300, making Indian onions costlier in the international market, and said it would import the edible bulb to bridge any local supply shortfall. These measures have helped keep onion prices largely in control, but have also led to agitation by farmers as they didn’t get the price they were looking for.

“Imports were required to check speculative price rise rather than to meet any shortages,” a Mumbai-based trader said, requesting anonymity. Nafed received just three bids for onion import tenders, including one from India. “Conditions like delivery of customs-cleared cargo and payment after 15 days of delivery have made traders stay away from the tenders,” the trader said.

Nafed had said that it could require importing onions any time after August 15. But there is plenty of stocks across the country because of record onion production during the 2013-14 rabi, or winter season, say traders. Rajasthan onion, which usually gets over by mid-August is expected to last until the first week of September this year due to higher production.

Farmers, expecting to get prices similar to last year, were holding on to the crop in May and June. “However, as the government controlled the prices, there is now more stock coming to the markets everywhere in the country,” said a wholesaler in Delhi.

Farmers could have made better profits by selling onions in April and May. Though the current price at Rs 15-16 a kg is higher thanRs 12-13 in May, they have lost about 25-30% of the crop because of damage caused in storage. The trading community, which is sure that the Narendra Modi government will not let prices escalate, wants the authorities to consider the current situation with farmers agitating over falling prices.

“This government will do anything to tame inflation as it has come to power promising to control it. But exports have declined significantly as Pakistan onion is selling cheaper than Indian onion due to our high minimum export price,” said an onion exporter from Mumbai.
(Catch all the Business News, Breaking News Events and Latest News Updates on The Economic Times.)

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