Reduction in the minimum export price (MEP) by the central government has failed to curb the continuous drop in onion prices. The average wholesale prices at the Lasalgaon Agriculture Produce Market Committee (APMC), the country's largest wholesale onion market, have declined by 20% in the past two days due to excessive supply.
Traders have demanded removal of MEP, which, at present, is 400 US dollars, until May next year to boost onion export from the country, thereby narrowing the demand and supply gap.
The average wholesale onion prices, which were recorded at Rs 1,250 per quintal on Monday, declined to Rs 1,000 on Wednesday at Lasalgaon due to rise in arrival of onions at Lasalgaon.
The Centre, following demand from all fronts - farmers, APMCs, local MPs and Maharashtra state government -reduced the MEP of onions from 700 US dollars to 400 US dollars on December 8 to boost onion export. But reducing MEP by 300 US dollars has clearly not worked in the traders' favour.
Speaking to TOI, sources from the APMC said, "The arrival of onions, which was around 5,000 quintals per day on an average a month ago, has increased four times in the range of 21,000 to 24,000 quintals per day. On Wednesday, the arrival of onions was recorded at 21,000 quintals per day, which led to decline in average wholesale onion prices." He added, "The arrival is expected to further increase in the next few days."
The sources added, "At present, kharif onions are arriving in the market, which have shelf life of less than a month and rot thereafter. since the crop is highly perishable, farmers can't store them and thus do not have an option but to sell the commodity at prevailing market rates."
Manoj Jain, an onion trader, said, "Around 70% of the arrival coming into the market is of domestic quality, but the demand for it has declined as arrivals in Gujarat, Rajasthan and MP too have increased at large. Onions from these states are being sent to the northern parts of the country like Delhi, Punjab, Haryana and Uttaranchal at an average rate of Rs 10 a kg. thus the demand from north India has declined."
Jain added, "There is a limitation to the export of onions. We can't export beyond that. The MEP of onions of Pakistan, China and other countries is lesser than India. This is also a major hurdle for the onion export. The central government needs to completely remove the MEP on onions."
