Centre's no to Odisha's plea to suspend onion exports

It refuted the state government's logic that exports cause volatility in price

The Union agriculture ministry has turned a deaf ear to the Odisha government's suggestion to temporarily suspend onion exports from the country amid volatile prices.

Refuting the state government's logic that exports cause volatility in prices, the ministry has stressed on ramping up production that can help stabilize prices.

“Historically, exports have accounted for about 10 per cent of the total production of onions in the country. This is true of this year as well. It is, therefore, not correct to assume that exports cause volatility in onion prices. In any case, exports show a downtrend when domestic prices are high”, Sharad Pawar, Union minister for agriculture and food processing industries wrote to Odisha chief minister Naveen Patnaik.

It may be noted that the country exported 101,000 tonnes of onion in July, 22000 tonnes in August and 19000 tonnes in September. This is against 162,000 tonne, 146,000 tonne and 151,000 tonne exported in the corresponding months of 2012. The Centre had fixed a minimum support price (MSP) of $ 650 (or Rs  41112.50) per tonne on onion exports with effect from August 14 this year which was revised to $ 900 (or Rs 56925) per tonne on September 18.

Pawar pointed out that frequent changes in export policy creates a sense of insecurity in the international market and raises issues regarding the long-term credibility of India as a reliable exporter of agricultural produce. The country's agricultural exports have grown from Rs 1.20 lakh crore in 2010-11 to Rs 2.32 lakh crore in 2012-13.

Pawar said, his ministry has also drawn up a long-term plan to increase the production and storage of onions.

“I shall be grateful if you could advise the State Horticulture Mission (SHM) to also take appropriate steps to increase the production of onions in the state which would go a long way towards stabilizing onion prices”, Pawar wrote in the letter.

Being a negligible producer of onions, Odisha banks on states like Maharashtra, Karnataka and Andhra Pradesh to meet its requirement standing at around 300,000 tonne annually.

Prices of onions were ruling in the range of Rs 35-40 a kg in the retail markets in the state.