NEW DELHI: Onion prices have started firming up, in the wake of the government’s move to abolish minimum export price (MEP) on the vegetable.
While most markets in Maharashtra remained closed on account of Christmas and other festivals, prices of onion in Delhi markets moved up by Rs 100 to Rs 1,250 a quintal. In Amritsar mandi also, onion prices moved by Rs 200 to Rs 1,400 a quintal.
The Directorate General of Foreign Trade (DGFT) on Thursday announced an exemption on onion from MEP on expectations of a bumper output this year. Earlier on December 12, the DGFT had cut MEP from the level of $700 a tonne to $400 a tonne to prevent exporters to contract large quantities with overseas traders.
“Onion prices have started moving up. For short term, onion prices may be little more up on a knee-jerk reaction from the government’s decision to exempt onion from MEP. Later, prices would decline once arrivals begin in full swing,” said Sanjay Sanap, an onion trader and owner of Shivkrupad Traders, Lasalgaon.
In Lasalgaon, onion prices have jumped by Rs 500 a quintal in the last two days to trade at Rs 1,100 a quintal.
The new season crop arrivals have started. But, the quantum of arrivals would jump manifold in the next couple of weeks, as harvesting of kharif and late-kharif varieties would begin probably by the last week of January. As the kharif sowing was delayed because of delay in monsoon, planting of late-kharif crop was in time. Therefore, both varieties of crop are set to hit the market in the next few weeks.
“The MEP exemption, therefore, would prove positive for farmers as the price crash, as expected earlier, would get arrested. Onion prices are unlikely to see a sharp fall from the current level,” said R P Gupta, director, National Horticulture Research and Development Foundation.
Both seasons together contribute about 40 per cent of India’s annual onion output of an estimated 19 million tonnes. Despite the monsoon delay, the output is likely to remain bumper this year as well.
The MEP of $700 (approximately Rs 46,270) a tonne earlier and $400 (approximately Rs 26,440) a tonne later was exorbitant, which prevented Indian traders to export to overseas markets. Since, the current price of onion in overseas markets is quoted at about $300 (approximately Rs 19,830) a tonne, Indian exporters were nearly out of the market.
India exports onion largely to Saudi Arabia, Colombo and some other far-east countries with an estimated annual volume of 1.5 million tonnes.
