Onion prices kept on hold

Govt leaves minimum export price unchanged at $495 a tonne.

Unwilling to take chances with the domestic onion prices, the government has kept the minimum export price (MEP) of onion unchanged at $495 per tonne even though a declining trend has set in onion prices.

"We have retained the MEP at $495 as on now. Though the domestic price situation is under control, we do not want to take a chance before the festive season is over," said Alok Ranjan, managing director, National Agricultural Cooperative Marketing Federation (Nafed), the agency that revises MEP on a monthly basis.

The MEP was raised from $445 to record $495 per tonne with effect from October 1 to curb onion export and check its rising domestic price.

In addition to this, the norms for issuing no objection certificates (NoC) for export were tightened and exporters were also required to take a licence from the Directorate General of Foreign Trade (DGFT).

Onion export has been canalised through 13 agencies of the union and state governments since 1998 and exporters are required to obtain a NoC.

During the April-September period this year, the country exported 384,000 tonnes of onion, a decline of about 36 per cent over the 605,000 tonnes shipped in the same period last year.

However, due to the cumbersome procedures laid down in October for undertaking exports, a significant drop in export is expected.

"The arrival in mandis has been good for the last few days and prices have slipped from Rs 1,500-2,000 to Rs 900-1,200 per quintal at the wholesale level. The declining trend is likely to continue," said Rajinder Sharma, general secretary of Potato and Onion Merchants' Association, Delhi. Retail price has come down to Rs 20 from Rs 25 per kg in the same period.

According to National Horticultural Research and Development Foundation (NHRDF), this year's kharif onion crop is estimated at 1.7 million tonnes, up 30 per cent from last year.