Onion: Export rate hiked, Pawar says prices to ease 2-3 weeks

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New DelhI: Worried over rising onion price, the government hiked the benchmark price for its exports by 40 per cent to USD 900 per tonne for augmenting domestic supply of the vegetable, even as Agriculture Minister Sharad Pawar said rates would ease in the next 2-3 weeks.
Notwithstanding onion prices skyrocketing, Food and Consumer Affairs Minister K V Thomas ruled out the possibility of declaring onion as an essential commodity, while Pawar, who is also the NCP Chief, said his party was not responsible for hoarding onion in Maharashtra.
The decision to raise the minimum export price (MEP) to USD 900 per tonne from USD 650 per tonne comes in the backdrop of retail prices soaring to Rs 70-80/kg, after dropping to Rs 50-55 per kg a week ago from the same high level.
"Exports of all varieties of onions...will be subject to an MEP of USD 900 per tonne," the Commerce Ministry said. After a fresh MEP was imposed on exports on August 14, exports in the same month came down to 29,000 tonnes from over a 1 lakh tonnes in the previous month.
When asked about high onion prices, Pawar told: "After talking to farmers and traders, my own assessment is that arrival of new kharif crop will increase substantially in next two-three weeks and prices will come down."
He stated domestic supply would improve as imports have started while exports have fallen. Asked about reports that blamed NCP for hoarding onions in Maharashtra, Pawar said: "How can NCP be responsible for hoarding? It is a foolish statement. NCP people are elected on the agriculture produce marketing committee, which has the job of looking into arrivals and auctioning."
The Centre has asked states to crack down on speculators and hoarders to check prise rise, but state governments could do little as the commodity is not under the purview of the Essential Commodity Act, a senior government official said.
Asked if the Centre is mulling placing onion back in the list of items covered under the Essential Commodities Act: Thomas said: "No plans to include onion in this category." States have other powers and influence to crack down on hoarders and speculators, he added.
Onion, a politically sensitive item, was deleted from the list of the Essential commodities Act (ECA) in 2004, following satisfactory production and stable prices.Earlier, there were 130 commodities under the Act. Gradually, the government reduced the number in the list to seven including drugs, fertiliser, food stuffs like edible oil and petroleum and petroleum products.
The Essential Commodities Act was enacted to ensure easy availability of essential commodities to consumers and to protect them from exploitation by unscrupulous traders.
Onion prices have surged in both wholesale and retail markets across the country. In the national capital, onion is is being sold for Rs 70-80 per kg compared to Rs 22 per kg a year earlier. Pawar said the rise in onion prices has contributed to inflation, while prices of other food items such as rice and wheat have been stable.
Stating that onion prices are under pressure now due to heavy rain, Pawar said: "Harvesting of early kharif crop in Andhra Pradesh and Karnataka has begun, but rain has caused transportation problem."
Similarly, in the Nasik belt of Maharashtra, farmers are facing harvesting problems due to rain.
Pawar said the arrival of new kharif crop, which normally starts in the October-November period in Maharashtra and other states, will improve the supply and price situation in the next two-three weeks.
Thomas, who met Pawar to discuss onion prices, said there is not much difference in arrivals in various markets at present compared to that earlier this month. "Arrival of onions is good. Our calculation is that prices will come down by end of this month or early next month," he said.
Thomas said farmers are holding back stocks in Maharashtra, which has a better storage capacity, in anticipation of better prices. States have been directed to take action against hoarders.