Nashik mandi auction closes for 8 days, others may join stir; critics say govt acted in undue hurry.
Protesting at yesterday’s Union government order banning export of onions, traders of the commodity today began an eight-day boycott of any physical auctioning at Nashik, the country’s largest centre for wholesale trade. The strike, to go on till September 16, may be extended, say the organisers, if the government ignores traders’ demand to remove the ban.
Around 30 per cent of the country’s onions come from Nashik. The agitation is likely to intensify, with groups of traders taking to other representative associations to join the stir. Although another important spot commodity trading centre remained open, the Agricultural Produce Market Committee (APMC) complex at Vashi in Navi Mumbai, the volume of trade remained thin.
| TROUBLED TIMES |
| * Farmers may join the stir |
| * Traders attribute price rise to supply disruption on frequent holidays |
| * Rs 10-11 a kg stock price is normal in lean season |
| * Export ban may prompt stockists to avoid storage for lean season |
| * Around 30% of country’s onions come from Nashik |
| * Last year, the retail price had zoomed to almost Rs 90 a kg in some centres |
“The agitation is likely to spread into other markets in the coming days, where (onion) farmers may play an aggressive role,” said Ajit Shah, president of the Indo Agro Produce Exports Chambers of Commerce, a farmers’ body.
An empowered Group of Ministers decided last evening on the ban, just a day after the same body ordered the minimum export price to be raised by $175 a tonne, to $475 (Rs 21,935) a tonne. The justification for both steps was the same, that the domestic retail price of onions had nearly doubled in three months. With the festive season approaching, and a general worry on rising inflation, the government wished to take no chances. A notification on the export ban is yet to be issued, prompting traders to prepone the despatch of consignments to ports for clearing.
Shah said the decision had been taken in a hurry, without considering the supply aspect. September and October are lean months for the onion market. Generally, farmers or stockists buy at Rs 5-6 a kg in April and store for sale during this season. They bear an average storage cost of Rs 1 a kg. Considering a 30 per cent weight loss on spoilage and dryness, the minimum cost comes to around Rs 8-9 a kg. Unless farmers or stockists sell at a minimum of Rs 10 a kg, the business will make no sense, said Shah.
In the Vashi APMC, the current price is Rs 11-12 a kg, which is considered normal. In the retail market, however, prices had almost doubled to Rs 22-24 a kg in recent days, because of lower supply from the wholesale mandis. The supply of all commodities had been disrupted in the past 10-15 days from warehouses due to several holidays. Hence, there was no need to press the panic button, which the government did without considering the cause of traders, said Yusuf Rizvi, owner of Rizvi Exports, a Mumbai-based onion exporter.
The new season’s crop is expected to start by October-end. Consumers will have to live with seasonal high prices for at least one more month. In case the price goes too low, due to the export ban, stockists may avoid stororage, he said.
In 2010-2011, the country produced 1.48 million tonnes, a rise of 24 per cent from previous year. Of the stored onions, a third is over and the rest should be available till the middle of November. Total onion exports were 452,409 tonnes until July, 34 per cent less than the same period last year.
Last year, the retail price had zoomed to almost Rs 90 a kg in some centres, owing to damage to the standing crop in Maharashtra.
