Retail onion price rise manipulated: Traders

Even as the government banned onion exports on Monday, following the doubling of wholesale onion prices in the past fortnight in the benchmark market in Nashik district, traders claimed that the price rise was manipulated. A real shortage of the bulb is likely to occur around November if rainfall continues during September and October, damaging the next harvest, they said.

Retail onion prices have risen to Rs 50 per kg at some places in the country while wholesale prices have doubled in the benchmark Lasalgaon market in Maharashtra to Rs 30 per kg. Traders from northern India have already started placing import orders for onion from Afghanistan.

The commerce ministry issued a notification on Monday evening, banning export of all types of onion. “However, this time, it has not even provided for the usual transitional provision by which cargo in transit is allowed to be shipped out, thus piling up onion containers at ports,” said Ajit Shah, president, Onion Exporters Association of India.

“We can clearly see that onion prices have increased only at the Pimpalgaon market in Nashik. Onion prices in all other markets in the country are lower than Nashik prices by Rs 10 per kg while the Nashik onion is available cheaper in Delhi than in Nashik. This indicates that the rise in prices was a result of manipulation,” said veteran onion exporter Danish Shah from Maharashtra.

The highest rate of Rs 40 per kg in wholesale was recorded at Pimpalgaon in Nashik. Excess rainfall has caused large-scale damage to the early kharif crop of onions in Karnataka and Andhra Pradesh. However, there is enough stock of onion in the country, especially in Maharashtra. Even Nafed (National Agricultural Cooperative Marketing Federation) has procured 100,000 tonnes of onions for price stabilisation. “We have started selling onions in Delhi and Mumbai. However, there was a tepid response in Delhi,” said Yogesh Thorat, managing director, Maha FPO, the federation of farmer producer organisations of Maharashtra, which has procured onions as an agency of Nafed.

Traders said speculative activities were carried out by those exporting onions to Bangladesh, which is facing an acute shortage of the commodity. As a truck takes four days to reach from Nashik to Kolkata, when prices rise while the cargo is on the go, it helps the exporter to increase his profit margins.

Normally, much higher quantities get exported than shown on paper in unchecked border trade by road, said traders. Hence, instruments like mandatory use of letter of credit and fixing minimum export prices help curtail unaccounted exports and allow genuine exporters to maintain their presence in the export markets, they said.

Although the Centre has introduced three bills in Parliament aimed at giving more freedom to farmers, the decision to put a break on onion exports has angered farmers in the onion growing states.

“The central government had recently removed onions from the Essential Commodities Act. Onion farmers were making losses till last month due to subdued prices. They are also bearing losses due to rotting of onions caused by excess humidity,” said Ajit Navale, general secretary (Maharashtra), Kisan Sabha.

Nationalist Congress Party chief Sharad Pawar met Union commerce minister Piyush Goyal in Delhi on Tuesday and requested him to reconsider the ban on onion exports. “Shri Piyush Goyal said that the ban on onion exports was proposed by the Union Ministry of Consumer Protection on the basis of rising onion prices in the market,” tweeted Pawar.