Rise in onion prices temporary: PM

Prime Minister Manmohan Singh on Saturday termed the rise in onion prices as a "temporary phenomenon" and said the government had no control over production of the commodity.

"This is a large country. These things happen. The Centre does not control production. It is a temporary phenomenon," Singh told reporters at an iftar party.

Meanwhile, the prices of onion, a politically sensitive commodity, have begun to soften as the new crop has started arriving at different mandis in Maharashtra, the largest producing state.

The steps announced by the Centre, such as the hike in minimum export price (MEP), have also helped in increasing the availability of the commodity and curbing the price rise.

Onion prices fell to Rs 15-18 a kg on Saturday from Rs 16-19 a kg on Friday in the wholesale market of national capital, traders said. Prices are likely to come down further to Rs 14-15 per kg by Monday, they added.

The canalising of onion exports has been formalised by the government and the quantum of the licence will be decided by the food ministry. Onion exports during the first half of this fiscal have fallen 37% to 3.84 lakh tonne compared to 6.05 lakh tonne a year ago.

Onion prices this year rose as production was hit last year in Maharashtra as farmers diversified to sugarcane. The production of onions is estimated at 6.66 million tonne during 2006-07 crop year ended September as against 8.68 million tonne produced in previous year.