Retail onion prices have shot up to Rs 50-65 per kg in most cities due to tight domestic supplies, as reported earlier by Business Standard. Onion prices are up by 25% in the last five days in Lasalgaon, the country's largest wholesale market for the red bulb, reported the Financial Express. Modal prices have been hovering above the Rs 3000 per quintal -mark due to a delay in the arrival of the fresh Kharif harvest. In Tamil Nadu's Salem district, prices have skyrocketed to Rs 160-170 per kg, the Hindu reported on Tuesday. The Centre is said to be contemplating re-imposing the MEP (Minimum Export Price) so as to check the outflow of supplies and bring down the prices. The rate could be in the ballpark of $500-700 per tonne, as reported earlier.
The MEP had been scrapped in December 2015 as a reaction to falling prices.Despite demand from Consumer Affairs Minister Ram Vilas Paswan, the export floor-price was not levied in August when retail onion prices had started showing an upward trend. The spurt in the prices of the kitchen staple led Uttar Pradesh CM to conduct a crackdown on onion hoarders last week. India’s onion export rose by 56 per cent to 1.23 million tonnes in April-July this year, according to DGCIS data (Directorate General of Commercial Intelligence and Statistics). However, the govt is said to be importing onions from Egypt and China to cater to the local demand. As reported earlier, former RBI governor C Rangarajan is of the view that wholesale inflation (WPI ) may ease by December, thereby ending the upswing in prices. It must be noted that inflation at the wholesale level rose to a six-month high of 3.59 per cent in October as the prices of food articles, led by onions and vegetables, rose sharply. The increase in prices of vegetable, in general, is expected to have a bearing on the RBI's policy rates, say experts.