Fearing fall in onion prices on likely good production in the coming days, Maharashtra government has demanded the Centre to extend export duty benefits beyond December 31 for promoting onion exports.
In September when onion prices had crashed, the Commerce Ministry had announced an export incentive of five per cent to exporters under the Merchandise Exports from India Scheme (MEIS) for both fresh and stored onions. The export incentive is valid till December 31.
"Since the crop of onion is huge and early disposal of the product is required, I request you to please take up the matter at appropriate level to ensure that inclusion of onion exports under MEIS continues," state Finance Minister Sudhir Mungantiwar said in a letter written to Union Finance Minister Arun Jaitley.
There is a need to continue the export incentive as prices are expected to come under pressure because of higher production not only in the state but also adjoining states like
Karnataka, Gujarat, Madhya Pradesh and Rajasthan, he said.
"Maharashtra onions can be consumed within the state or exported out of the country. If onions cannot be exported, there will be a collapse of onion prices and farmers will have to face severe crisis and they will not be able to recover their production costs," he said.
The kharif onions cannot be stored for long. "If farmers are not able to sell at remunerative prices, they would be compelled to leave the onions in the field without harvesting."
The arrival of kharif onion is expected to start in full swing from next month in Maharashtra, the leading state in onion production.
Onion exports were at 13,56,381 tonnes in the April-September period of this fiscal.
The country's total onion production in 2015-16 crop year (July-June) is estimated to be higher at 20.99 million tonnes from 18.92 million tonnes last year. Maharashtra contributes more than one fourth of the country's overall output.
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During his visit to New Delhi yesterday, Mungantiwar also met Jaitley along with a delegation of onion producers and exporters from the State.
"It is more than the average of a good season, ie 1.75 lakh metric tonnes. It is likely that neighbouring states such as Gujarat, Madhya Pradesh, Karnataka, and also Rajasthan and others, too, will have bumper production of onion thanks to a good weather," Mungantiwar told reporters in Mumbai today.
He said exporting onions is necessary to ensure its production remains profitable and prices stable.
"Currently, the Centre gives grants for export of onion under the trade production encouragement scheme. This scheme will expire on December 31. Due to this scheme, onion producers and exporters gained market at the international level and competed with other countries," the Minister said.
"If this scheme is not given an extension, the export capacity of onion producers and exporters would be hampered and they would face difficulties in accessing markets in other countries and exporting their produce," he added.
Mungantiwar said this will result in a drop in onion exports and glut in the domestic market, causing a crash in the commodity's prices.
He said Jaitley has assured him and the delegation that he would take a positive action over their demand.
