Govt again reviews onion price spike

Decision on MEP that was abolished in June last year yet to be taken

Worried over a spurt in onion prices, senior government officials today held another round of meeting to discuss measures to control the spike in prices including re-imposition of the Minimum Export Price (MEP) on outbound shipments of onions.

MEP on onions was abolished in June last year, following a sharp decline in domestic prices.

"An inter-ministerial meeting again reviewed the price spike in onions, where the issue of re-imposition of MEP was also discussed," a senior government official who participated in the meeting said.

However, he declined to divulge when the MEP would be imposed if needed and by what amount. On Thursday, senior officials from the department of consumer affairs, commerce and agriculture held a meeting with the union cabinet secretary to deliberate on a surge in onion prices.

However, agriculture minister Sharad Pawar is understood to be not in favour of immediate imposition of the MEP.

Earlier this week, news agency PTI quoted Sharad Pawar as saying that a rise in onion prices as a 'temporary phenomenon' and supplies would improve soon.

Onion prices shot up by 57% to Rs 22 per kg in the last one month in the wholesale market of Nashik, a major producing centre, forcing the government to consider steps to control prices.

The price rise is, however, more than five-fold compared to the same month last year. In most retail markets across the country, onion is selling at Rs 35-40 per kg.

Meanwhile, a senior official of the Nasik-based National Horticultural Research and Development Foundation (NHRDF) attributed rise in wholesale prices of onion to higher demand and increased cost of production. Arrival of the bulb is at the last year's level, the official said.

The domestic demand has risen by 10%, while domestic production is expected to be at last year's level of 174 lakh tonnes despite drought in key growing states, especially Maharashtra and Karnataka, the official said.

Yesterday, Delhi Chief Minister Sheila Dikshit had written a letter to Pawar seeking "urgent" intervention to curtail export of onion, a politically sensitive commodity.

According to NHRDF data, wholesale price at Lasalgaon in Nasik, Asia's largest onion market, stood at Rs 22 per kg on Friday, as against Rs 14 kg a month ago and Rs 4.13 in the year-ago period.

Maharashtra, Karnataka and Gujarat are the top three onion growing states in the country which suffered a drought.