Curbs on onion exports temporary
Commodity Online NEW DELHI: The government has decided to rein in onion prices, fearing a major controversy over the commodity’s increasing prices. However, department of commerce officials have clarified that the steps taken by the government to check the prices are temporary.
The Directorate General of Foreign Trade (DGFT) had this week issued a notification restricting export of all varieties of onion, including rose onions and Krishnapuram variety, only by licence through designated canalising agencies.
Officials said the licensing route to leash export is only a temporary measure to tide over domestic tight availability position and to stem the accompanying spurt in domestic prices.
Traders said onion prices will come down in the coming weeks in the domestic market including New Delhi where it is being sold at Rs 30-35 per kg, on the fact that area under onion cultivation in the ongoing kharif season is likely to increase by 16 per cent and the consequent spurt in production is likely to be about 20 per cent.
The higher production stems from good rains in almost all the kharif growing states.
Kharif onion harvesting for early planted crop had started in August in Andhra Pradesh, Karnataka and Tamil Nadu. In Maharashtra, early crop began last month and Gujarat and Rajasthan from this month onwards.
Major harvesting of kharif onion would be from next month and kharif onion is not to be stored as huge production comes from rabi season crop which gets harvested from March end. Good quality produce is stored during April-May.
In the face of domestic flare-up in onion prices in certain regions and not all across the country, exporters feel that any restrictions placed on export would undermine India’s well-established overseas markets as both China and Pakistan have been posing tough competition.
The officials said frequent jacking up of minimum export price (MEP) of onion through administrative orders would erode India’s market position when it exported a record 1.13 million tonnes of onion during 2006-07.
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