Hike in onion export price fails to improve domestic market

Steep hike in onion export prices has failed to improve domestic market scenario as the vegetable continues to be expensive at a retail price of Rs 35 a kg in Delhi.

Besides, onion continues to be expensive in the wholesale market, even after the agri-cooperative and onion export regulator NAFED hiked the commodity export price last week to $150 a tonne.

The NAFED's decision to increase minimum export price (MEP) from $375 a tonne to $525 a tonne for this month was necessitated by sharp increase in retail price of the vegetable at Rs 40 a kg over a fortnight period.  

The measure, the cooperative had hoped, would help  bring down the onion price below Rs 30 per kg.

However, trade sources inform that onion is being sold between Rs 25-30 a kg in wholesale market in Azadpur, which is Asia's biggest fruit and vegetables market. They add this has been the prevalent rate for the last 4-5 days. 

Good quality onion at retail outlets in Delhi is available at Rs 35 a kg while poor quality wet onions are being sold at Rs 30 a kg.

The country has shipped 10.10 lakh tonnes of onion so far this fiscal, against 12.99 lakh tonnes in the year-ago period, the official data showed. India exports onions to Bangladesh, West Asia, Singapore and Malaysia. 

Prices of onion have risen because of supply crunch due to rain, triggered by cyclones in the South and heavy downpours in Maharashtra and Madhya Pradesh, Onion Merchants Association Azadpur market President Rajendra Sharma said.

Maharashtra ranks first in Onion production with a share of 18 per cent.

There is a shortfall in supply of 35-40 per cent at Azadpur market in Delhi, which has lifted the price, said Metharam Kriplani, the President of Chamber of Azadpur Fruit and Vegetables.

"Export rush of onion for handsome profit has telling affect on its prices in domestic market," Kriplani said.   

But, the situation is showing some improvement with arrival of crop from Rajasthan, Sharma said. Over 275 tempos of onion (each carrying about 8 tonne) arrived at Azadpur market today from Rajasthan to boost the supply, he added. 

Meanwhile, NAFED has said it will be reviewing the export prices by month-end.