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Govt set to curb onion exports
Markets could run low on onions again, prompting the government to consider taking a key monetary step to curb exports and check domestic prices from spiralling. Zia Haq reports. Upsetting the budget
Markets could run low on onions again, prompting the government to consider taking a key monetary step to curb exports and check domestic prices from spiralling.
After discussions on Monday, agriculture minister Sharad Pawar and food minister KV Thomas decided to hike a fee charged from onion exporters, or the “minimum export price,” amid signs of a major shortfall in output.
Export of onions, other than premium varieties, currently attracts a levy of $275 (Rs 12,375) a tonne. This is set to go up by at least 5%.
Spells of summer rains recently spoiled crops in Nashik, a prime onion-growing region in the country. The shortfall could be as much as 3 lakh tonnes, a government official said, requesting anonymity.
Since this is equivalent to India’s total exports, the government hopes to keep prices affordable by paring exports of non-premium varieties, such as “Bangalore Rose” and “Krishnapuram”.
"Onions are currently selling between Rs 12-15 (a kg) in the wholesale markets. By increasing the minimum export price, we will be able to keep retails prices around Rs 21-22 per kg,” food minister Thomas told HT.
The seeds of the current crisis were sown when late August rains caught farmers unawares in western India.
High-moisture levels and temperatures, when the skies clear up, could pave the way for a wave of diseases, such as purple blotch, the onion plant's equivalent of leprosy. A similar attack followed by untimely rains had cut output last December.
“Summer harvest accounts for just 15% of the total annual production, but it is the most important because it comes at a time when onion stocks from previous harvests are fully exhausted,” RP Gupta, director of the Nashik-based National Horticultural Research and Development Foundation (NHRDF) said.
Such explanations don't make things easy for a government fighting persistently high food inflation.
An index measuring wholesale prices of farm products rose 10.05% in the week ended August 20 from a year earlier, scaling to a four-month high on the back high onion and dairy prices.
