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01 June, 2020, 09:10 PM IST

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A problem of plenty: India's onion mess

What the government is doing is hurting farmers rather than resolving the country’s onion mess.

Onions making you cry?

View: Forget onion export ban, invest in storage and processing

Encouraging imports, not banning exports, is the remedy to augment supplies.

  • PSU places a ceiling of $352/tonne for 2,000 tonne, even as onions in government’s buffer dry up.

    The government had last week decided to lift the nearly six-month-old ban on export of onions as prices are likely to fall sharply due to bumper rabi crop. The government had last year amended the export policy of onion from ‘free’ to ‘prohibited’. To meet domestic demand, India began importing onions from Turkey, Afghanistan and Egypt.

    The central government's spending on the rural sector has increased 21% in the first seven months of fiscal 2020, the fastest growth in 11 years. All these factors, the unusually strong water reservoir levels and pick-up in rabi crop sowing activity, are initial signs pointing toward the rural sector bottoming out, Motilal Oswal says.

    Potatoes, onions and green chillies are getting costlier in city markets than what their prices were before the protests began. Many transporters are apprehensive to ply trucks after buses were torched in several parts of the state during the protests. This has led to a reduction in the availability of vehicles for transporting agri-commodities.

    Besides stock holding limit, he said, the Centre has banned exports of onion and importing 1.2 lakh tonnes to control prices. Onion prices are ruling at Rs 70-80 per kg in retail markets across major cities. "Stockholding limit on retailers and wholesalers are being further extended until further orders," an official statement said.

    The onion prices are skyrocketing due to unseasonal rains in producing states. Onions are being sold at Rs 80 per kilogram in Nagpur market....

    Consumer Affairs Secretary A K Srivastava held a review meeting with various states on demand, supply and prices of this key kitchen item. Sources said it was informed that MMTC has contracted 6,090 tonnes of onion and the consignment from Egypt would reach Mumbai port soon.

    The rates were as high as Rs 165 a kg in Panaji, while the average of 114 major cities in the country came to over Rs 100, according to official data available here. Onion prices started to climb from September and have averaged over Rs 100 per kg since November 25.

    The highest price of onion, normally fetched by only a few quintal onions, was Rs 82 per kg at Pimpalgaon Agricultural Produce Market Committee (APMC), India’s largest onion market. The lowest price of the day for good quality onion was Rs 45 per kg while it was Rs 22 per kg for inferior quality, rain damaged onion.

    The move comes after the government's various efforts to boost the domestic availability failed to cool down the retail prices significantly. Retail prices of onions are continuing to rule above Rs 60/kg in Delhi. Onion prices have come under pressure due to 26 per cent fall in the production to 52.06 lakh tonnes during the kharif output late-kharif seasons of 2019-20.

    The retail prices of onion had soared to Rs 100/kg a week back in the national capital, but the government's various interventions helped it to cool down. The shipments will come smoothly as the government has liberalised phytosanitary and fumigation norms for import of onion till December-end, the official added.

    Retail prices of onions have gone up to Rs 70-80/kg from Rs 30/kg in the last couple of weeks due to supply disruption.

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