Onion MEP hiked marginally

With onion prices showing marginal upward movement in the last two weeks, the government on Thursday marginally increased the minimum export price (MEP) by $20 a tonne for August to ensure adequate domestic supplies.

Due to bumper production this year, the government kept the onion MEP at an average of $200 a tonne since April. "Marginal rise in MEP would help domestic supplies, which is being met through stored onions," an official from the National Agricultural Cooperative Marketing Federation (Nafed), the designated agency for regulating onion exports, told FE.

In 2009-10, India's onion exports had risen marginally to 1.81 million tonne against 1.78 million tonne in the previous year. A Nafed official hoped that this year also, the exports would be at the same level.

Retail price of onion went up to Rs 20 per kg in June, before falling to the current levels of Rs 12- 13 per kg because of the wholesale markets in Lasalgaon, Pimpalgaon and Manmard near Nashik were closed for about two weeks.

As the current demand for onion in India is being met from old stocks in Maharashtra and other southern states, the wholesale price in Nashik has increased marginally from Rs 550 a quintal to Rs 700 per quintal in the last two weeks.

According to a data from the department of consumer affairs, retail price of onion in the last last three months has remained stable at around Rs 13 a kg and Rs 12 a kg at Delhi and Mumbai, respectively.

However, the retail price has jumped in Kolkata from Rs 8 a kg to Rs 13 a kg at present. Prices in Chennai, Bangalore, Hyderabad have increased marginally during the period.

"Around 15-20% stored stock has already been exhausted and the balance can sustain demand only till October or November 2010. But, the good news is harvesting of early kharif crop has already started in Andhra Pradesh's Kurnool area and also in Karnataka and the new crop should start coming into the market from late August onwards," a National Horticulture Research and Development Foundation (NHRDF) crop prospects report showed.

India harvested a record 8.5 lakh tonne of onion this year almost 12% more than last year's harvest of 7.6 lakh tonne largely because of favourable weather condition during the winter months.

Rabi onion production contributes 60% of the total production while late kharif and kharif output contribute 25% and 15% respectively.