Centre, Maharashtra unite to ensure onion prices fall by 50%

Alarmed at the skyrocketing prices of onions, the government on Wednesday abolished the custom duty on its import. It had already banned onion exports on Monday as its prices touched Rs80-85 a kg in most retail markets.

“The customs duty on onions has been brought down to zero,” finance secretary Ashok Chawla said. Agriculture minister Sharad Pawar on Tuesday had said onion prices will remain high for two to three weeks.

The state government, however, is hopeful that the prices will fall in five days with the arrival of 2 lakh quintals of onions in Maharashtra.

Sources told DNA onion prices are expected to fall by nearly 50% - to nearly Rs35 per kg.

Agriculture minister Radhakrishna Vikhe-Patil said on Wednesday 1.40 lakh quintals of onions imported from Pakistan will reach the state in four days. Another stock of 50,000 quintals from Rajashtan, Gujarat and Madhya Pradesh will be available in 15 days.

Apart from this, the state will be able to save 15,000 quintals meant for export because of the ban.

The minister said until the first stock of the rabi season arrives in the market around mid-February, the marketing and co-operation departments will have to rely upon supply from outside Maharashtra.

The shortfall in the state is attributed to the loss - as much as 87% of the rabi crop in Nashik’s Lasalgaon and other districts such as Satara, Pune and Ahmednagar.

Lasalgaon is the largest growing tehsil with 2 lakh hectare soil under cultivation of onion.

“The loss of the onion crop in the state has led to a tremendous rise in prices,” Vikhe-Patil said. “To avoid such a situation in the future, we have decided to increase the stocking capacity from 2 lakh metric tonne (mt) to 8 lakh mt in 2-4 years. We are also introducing a mechanism that would help us review the stock the farm produces four months in advance.”

The minister added: “The rise in the price of onion seeds - from Rs1,200 per kg to Rs4,000 per kg - clubbed with its scarcity has also resulted in losses to the farmer. For the next season, we have directed the seed corporation to avail of seeds on time for sowing.”

Maharashtra is the largest onion growing state with 31.5 lakh mt of the national production of 80 lakh mt a year. The state had a share of 13 lakh mt of the 18 lakh mt of onions exported last year.

Till November-end this year, Maharasthra exported only 8 lakh mt of the country’s total export of 11 lakh mt.

As the common man bears the brunt of the rising prices, the Congress feels an early warning on increasing rates of essential commodities is essential to address the problem.

“The current situation on onion prices is temporary. We have had a bad spike mainly because unseasonal rains hit the crop in Maharashtra. This could have been avoided by an early warning signal system that could have prompted a ban on exports, or some advance imports,” Abhishek Manu Singhvi, Congress spokesperson, told DNA.

“We should be extra sensitive on the issue of price rise as the common man feels the pinch.”

Singh also conceded that hoarding and speculative activities are responsible for onion prices hitting the roof. He asked all state governments to take adequate steps to ensure hoarding does not take place. The railways, meanwhile, have promised providing enough wagons for speedier transportation of onions.