Retail onion prices surge 140% as exports zoom

Retail prices of onion have surged 140 per cent rise in the last one month even as exports have grown 62 per cent in the first 10 months of the current financial year. Over the last one month, retail onion prices have surged from Rs 10 to Rs 24 per kg.

The sudden surge in prices and its effect on the common man is causing concerns among economy watchers and the government, which is contemplating measures to check the price.

During the said period, the country has exported 9.42 lakh tonne of onion, valued at Rs 775.43 crore. This is 62 per cent higher than the 5.8 lakh tonne exported over the same period last year.

However, production of onion, according to an official with the National Horticultural Research and Development Foundation, is similar to 2005-06 season. In 2005-06, the country produced 62.23 lakh tonne onion.

"There is increasing demand for onion from countries such s Pakistan and Dubai and higher exports are fuelling the domestic onion prices," said Sandesh Bajare, an official of the Maharashtra State Agricultural Marketing Board. Maharashtra accounts for about 30 per cent of the country's output.

Until May 2003, the government has a quantitative restriction on exports of onion. After its removal, onion exports have surged by 72 per cent.

As exports rise is a factor in domestic prices, government may consider re-imposing the quantitative restriction.

However, Alok Ranjan, managing director of the National Agricultural Cooperative Marketing Federation is of the view that the onion arrivals are good and prices will stabilise over next few days.

Last year, the government had banned export of sugar and pulses to check the rising inflation. Earlier this month, the export of skimmed milk powder was banned to contain their rising prices.