Nafed halves export price of onion

A $175 cut leaves the price at $250 from $425 a tonne.

With onion prices softening in the domestic market, agri-cooperative Nafed has almost halved the minimum export price (MEP) of the edible bulb to $250 a tonne from $425 a tonne for December. The move is to boost overseas sales.

"We have reduced the MEP of onion by $175 a tonne," National Agricultural Cooperative Marketing Federation Managing Director Alok Ranjan said. The average MEP now stands at $250 a tonne, he added.

Nafed and 12 other agencies issue no-objection certificate for onion exports and fix MEP every month for various overseas destinations.

The MEP was reduced by $70 a tonne on November 20. The revision was done in the middle of the month as MEP was kept unchanged at the start of last month due to Diwali.

Ranjan attributed a sharp cut in MEP for onion to drastic fall in domestic prices, which have even led to protest by farmers in some parts of Maharashtra and Karnataka.

"Domestic price has fallen drastically. Wholesale price in Nasik has declined to about Rs 500 per quintal," he said, adding that the reduction in MEP would help increase the onion export. "We have lost the export market," he said.

In Nasik also prices eased to Rs 725 a quintal from Rs 1,300 a quintal, while in Pimpalgaon they dropped to Rs 621 a quintal from Rs 1,129.

In the national capital, onion was being sold at Rs 13 a kg in the retail outlet of Mother Dairy, while the bulb was available to consumers at Rs 12-14 a kilo in neighbourhood markets yesterday.

However, traders said a cut in MEP was necessary as exports of onion fell substantially in November.

The export of onion declined by 45 per cent to 4.38 lakh tonnes during April-November period of the current fiscal as against 8.02 lakh tonnes in the year-ago period, according to the Nasik-based National Horticultural Research and Development Foundation.

The dip in export was due to poor shipment in October-November, a Mumbai-based onion exporter said. Onion export fell to 30,714 tonnes last month against 1.08 lakh tonnes during November 2006.

The export price for Bangladesh has, however, been cut only by $80 to $350 a tonne.

The prices of onion, a politically sensitive commodity, have dipped in the growing belts of Maharashtra and other states.

In Maharashtra's Lasalgaon wholesale market, prices slumped to Rs 709 a quintal on November 30 from Rs 1,421 a quintal at the beginning of the last month.