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The average retail price of onions, a commodity on the government's radar for deciding on imposing a minimum export price (MEP), rose 15% in June (till Thursday) as compared to January in Mumbai and Chennai. However, prices eased in both Delhi and Kolkata over this period, show official data.
In fact, prices declined as much as 22% in Delhi over this period and 5% in Kolkata, data tracked by the consumer affairs department revealed.
In fact, average monthly prices of onion declined even in Mumbai, from Rs 24.72 a kg in January to Rs 21.29 the next month and further to Rs 21 in March. However, they've been rising since, to Rs 23.71 in April, to Rs 26.47 in May and to Rs 28.4 a kg on an average in the first 12 days of June.
In Chennai, prices declined from Rs 17.12 a kg in January to Rs 14.4 the next month. It has been rising since, to Rs 15.59 in March, Rs 16.13 in April, Rs 16.89 in May and Rs 19.67 in the first 12 days of June.
A senior official from the department of consumer affairs said it was usual for onion prices to rise during this time of the year, as the rabi crop is exhausted and the new kharif arrivals will begin only by the end of July or early August.
"This is nothing unusual in onion price movement; it is following the trend. As of now, there is no cause for worry or any alarm but at the same time, we are closely monitoring the price movement," the official said.
Delhi and Kolkata might also see some upward movements but only till arrival of new crop. "The current trend of high prices will continue till the end of July and thereafter prices would subside as new arrivals will come," another official said.
On re-imposing the MEP, the official said the government will monitor the price movement for the next week to 10 days and then decide. "There is no cause for panic but one needs to be alert," the official explained.
Alertness is also required because the monsoon is officially projected to remain sub-normal in all parts of India this year, except for northeastern areas. The major onion producing states are Maharashtra, Karnataka, Madhya Pradesh, Gujarat, Bihar, Andhra Pradesh, Rajasthan, Haryana and Tamil Nadu. Maharashtra ranks first in production, with a share of 32 %.
The government had in September last year imposed an MEP on onions after its prices surged. In Mumbai, it rose to Rs 55.88 a kg in September 2013 from Rs 21.48 in January. However, after retail prices crashed due to a bumper harvest, the MEP was withdrawn in March 2014.
India produces 17-18 million tonnes of onions a year. An essential kitchen staple, it is a politically sensitive commodity. Its surging price is held to have led to the defeat of the Bharatiya Janata Party in the 1998 Delhi assembly elections. And, rising prices of essential commodities, particularly onions and tomatoes, were blamed for a rout of the Congress governnment at the hands of the BJP in Delhi and four other assemblies late last year.
An MEP is imposed to augment domestic supply of onions. Pushed up by a spurt in unit value realisation, India's onion exports surged in value terms by 25% to Rs. 2,877 crore in 2013-14, even as volumes registered a low growth. The country's total onion export was Rs 2,294 crore in 2012-13. However, in volume terms, exports fell 25.5% to 1.35 million tonnes during 2013-14 as against 1.82 mt the previous year.
The average of milk prices are also being monitored. to decide if there should be a floor price of export of skimmed milk powder. Prices rose 13% in Kolkata and 12% in Delhi from January to June (till 12th). Mumbai saw a 6% rise over the period
"This is usual for prices to rise during the summer season as supplies go down," an official said. He was hopeful that it would stabilise in the next few weeks.
However, prices remained flat in Chennai.
Exports of dairy products more than doubled to Rs 3,318 crore in 2013-14 from Rs 1,412 crore the previous year.
