Onion export floor at $300/tonne

NEW DELHI: Remember when you learnt to use slivers of cabbage instead of onions in your cooking some years ago when the price of the vegetable shot through the roof? Get set for a re-run this Diwali. Apprehensions over the impact on state elections in three states as well as fears of floods and heavy rains in AP, Karnataka and Maharashtra have forced Nafed to hike onion���s minimum export price (MEP) to a record $300 per tonne for October. This is the highest MEP in recent years and a big boost since the MEP has gone up by a whopping $85 per tonne.

���The MEP for onion was $185 in July and went up by $20 in August, and again by $10. In October, there has been a 40% hike in the MEP. There were no plans to hike the MEP by such a steep amount, but the recent sharp increase in onion prices has necessitated this. If imports fall over the next fortnight, we hope prices will regulate. The unusually high MEP will ensure exports do not tighten domestic supplies,��� an official of the department of consumer affairs said.

The move comes even as onion prices in domestic markets, which were lower than the prices for potatoes (at Rs 27-28 per kg in metros) just a fortnight ago. Currently, onions sells in metros for Rs 20-22 per kg, even as potato prices calibrated downward to about the same level, and are expected to shoot up higher.

Due to the floods, there is apprehension that stored onions may go bad. In addition, with basic infrastructure such as roads, bridges and transport being affected, it is unlikely that produce of any good quality can be ferried to the big markets from several crucial onion areas in Karnataka and AP. Consequently, wholesale prices in Nashik have reportedly doubled to Rs 1,300 per quintal from Rs 650.