Onion prices up over 30% in Maharashtra as curbs on exports lifted
Onion prices surged more than 30% over the weekend in Maharashtra after the Centre lifted export restrictions on the commodity on Friday, the day after the Budget. The decision is expected to help support prices, which are expected to come under pressure from March as harvesting of bumper rabi crop begins.
India had curbed onion exports by imposing a minimum export price (MEP) of $850 per tonne in November. This was reduced to $700 per tonne in January and was to remain in effect till February 20. In his Budget speech on February 1, however, Finance Minister Arun Jaitley promised to liberalise agriculture exports. "India's agri exports potential is as high as $100 billion against current exports of $30 billion. To realise this potential, export of agri commodities will be liberalised," he said. The government announced removal of MEP the next day. While announcing the removal of MEP, Union commerce minister Suresh Prasbhu tweeted: "We are taking all measures to promote exports of agriculture products." Since then, average wholesale onion prices have jumped Rs 4-5 per kg across Maharashtra, the country's main onion supplier, rising to Rs 20 per kg at the benchmark Lasalgaon agriculture produce market committee in Nashik district. CB Holkar, former director of Nafed (National Agricultural Cooperative Marketing Federation of India) said: "Removal of MEP was a much-needed decision, especially as the country is staring at a bumper summer crop, which will hit the markets from March 15 Though the market has responded with a sharp rise in prices, the rise is said to have been mainly driven by traders, who are expected to book their profits. Exports are likely to increase only gradually, hitting their peak March onwards. At present, Indian traders will be able to ship onions to only those countries or regions that consume only Indian onion and are ready to pay a premium for it.
By BOA Bureau