Government keeping close watch on onion, milk prices

NEW DELHI: With onion and milk prices showing an upward cue, the government today said it is closely watching the trend and will take appropriate steps to ensure adequate availability of these commodities in the domestic market.

"Onion and milk are important. We are closely observing the price trend and an appropriate action will follow, whenever required," Commerce Secretary Rajeev Kher told reporters here.

He was replying to a question whether the government is mulling any export restriction considering the possibility of deficit monsoon and rising prices.

Onions are costlier by Rs 5/kg in retail markets in most cities compared to last year prices. At present, onion prices are hovering in the range Rs 20-25/kg in Delhi. It was Rs 17/kg in the year-ago period.

"Our approach to agri exports is broadly nuanced by the fact that agri exports as far as possible should be open but clearly they are underlined by the attenuating factors of domestic demand and supply," he said.

He said the government has reviewed the situation and there is no cause of worry for wheat and rice at present.

Consumer Affairs Secretary Keshav Desiraju had recently said that a call on re-imposing MEP would be taken by the Cabinet Committee on Prices soon. At present, there is no minimum export price (MEP) on onion.

Kher also said that the department dealing with future trading too is watching the situation.

In September last year, retail onion prices had shot to up Rs 100 per kg in many parts of the country. To rein in prices, the government had imposed MEP on onion and the minimum export price was raised several times to curb outbound shipments and boost domestic supplies. The government even imported onion.

With domestic supplies improving and wholesale prices crashing, the Centre had later done away with the MEP.

In the 2013-14, total onion exports fell by over 25 per cent to 1.35 million tonnes as against 1.82 million tonnes in the previous year.

According to the government research body National Horticultural Research and Development Foundation (NHRDF), total onion production is estimated to be higher by 15 per cent at 19.29 million tonnes this year (July-June) from Rs 16.81 million tonnes a year ago.

In India, the world's second largest onion producer after China, onion is grown in three seasons -- kharif (summer), late kharif and rabi (winter).

Costlier vegetables, fruits and milk pushed up retail inflation to three-month high of 8.59 per cent in April.

Inflation in milk was 11.42 per cent in April as against 11.02 per cent in the previous month.

Amul and Mother Dairy, the two major milk suppliers in Delhi had increased prices by Rs 2 a litre recently.