Traders call for ban on onion exports

Traders have demanded an immediate ban on onion exports to check spiralling prices in anticipation of supply tightness towards the year-end because of lower output.

"Even though the ban would not compensate for 40 per cent of the estimated output loss this year, it would offer some relief to consumers," Yusuf Rizvi proprietor of Rizvi Exports, a noted onion trader in Mumbai, said. During the current financial year, India's onion exports stood at 1.79 lakh tonnes against 2.85 lakh tonnes in the year-ago period. The country's total exports accumulate up to 1 million tonnes every year.

Normal variety of onion eased by Rs 20 to settle at Rs 100 per 10 kg, while super variety was traded at Rs 105 per 10 kg last week. But, traders are hopeful that the price would rebound once again this week and continue moving upwards. Within a month, onion is expected to touch the peak of Rs 150 per 10 kg, mainly because of shortage of availability. Citing reasons for the price rise, Rizvi said that farmers are storing their produce at double the storage cost, which has increased to Rs 450-500 a quintal from Rs 200-250 last year. Farmers are now waiting for the price to settle down above Rs 100 per 10 kg to flush out their inventory.

"Last price hike invited arrivals from Indore and Rajasthan to Mumbai mandis, where stocks have almost exhausted. Now, the entire country depends upon Nashik onion," said Ashok Valunj, director, APMC. Last Friday, the arrivals at the Vashi APMC dried to 70 gadi (1 gadi = 10 tonnes) from the normal at 100 gadi. Total consumption in Mumbai alone accounts for 100 gadi, excluding export demand of 20 tonnes.

With demand pouring in from Sri Lanka and Dubai, exporters are booking at more than Rs 100 per 10 kg to meet their commitments. As a result, prices are not going to ease in the near future, Rizvi said.

Talking about the crop scenario, Rizvi said Gujarat and Rajasthan would have lower then expected crop this year on a slowdown in sowing. Crop in the South has been badly affected. Hence, Nashik crop is going to supply onion throughout the country.

Rizvi estimated onion price to surge to Rs 20 per kg by Diwali. Meanwhile, government agencies have decided to raise the minimum export price (MEP) of onion by $80 (Rs 3,264) to $305 (Rs 12,444) a tone effective June 19 following an increase in the domestic prices.