Onion export duty 'timely' move to boost domestic supply, check price rise

The government on Monday said the decision to impose a 40 per cent export duty on onions was not a "premature" but a timely move to boost domestic supply and control retail prices.

The statement comes amid farmers' protest at several places in Nashik district in Maharashtra against the 40 per cent duty imposed on onion exports. Traders are also against the imposition of the duty.

"It is not a premature decision to impose export duty on onion. It is a timely decision taken to increase the domestic availability and check prices," Union Consumer Affairs Secretary Rohit Kumar Singh told PTI.

Till the situation demands, Singh said the government will intervene with release of buffer onions in both the wholesale and retails markets in select states.

On Saturday, the Centre imposed a 40 per cent duty on the export of onions amid signs of price rise as well as increase in outward shipments.

The decision to impose export duty on onions for the first time ever is also aimed to curbing prices of the kitchen staple ahead of the festive season.

In Delhi, retail prices of onions have touched nearly Rs 40 per kilogram, as per official data.

Currently, Singh said the government is releasing onions from buffer stocks in Delhi, Telangana, Andhra Pradesh, Himachal Pradesh and Assam.

In the last two days, 2,500 tonnes of onions were sold at a subsidised rate of Rs 25 per kg in Delhi-NCR, he added.

The Centre's decision was also prompted by a surge in onion exports.

Between April 1 and August 4 this fiscal, 9.75 lakh tonnes of onions have been exported from the country. The top three importing countries in value terms are Bangladesh, Malaysia and the UAE.

Earlier in the day, traders decided to close onion auctions indefinitely in all the Agriculture Produce Market Committees (APMCs) in the Nashik district, including at Lasalgaon, which is the largest wholesale onion market in India. However, APMC sources said onion auctions took place in Vinchur, which is also in the same district.

Apart from the export duty, the central government on Sunday announced it will procure an additional 2 lakh tonnes of onion in order to maintain a total buffer stock of 5 lakh tonnes this year.

For the current fiscal, the target for onion buffer was kept at 3 lakh tonnes, which has already been procured.

Currently, the same buffer stock is being disposed of in the targeted markets in select states to improve the local availability and check price rise.

The National Cooperative Consumers' Federation of India (NCCF) and the National Agricultural Cooperative Marketing Federation of India (NAFED) have been directed to procure one lakh tonne each to achieve the additional procurement target alongside calibrated disposal of the procured stocks in major consumption centres.

The buffer stock is maintained under the Price Stabilisation Fund (PSF) to meet any exigencies, if rates go up significantly during the lean supply season.

On disposal of onion from the buffer stock, the ministry had said it has already commenced in target major markets in states and union territories where retail prices are above the all-India average and/or are significantly higher than the previous month.

Apart from releasing in major markets, onions from the buffer are also being made available to retail consumers at a subsidized rate of Rs 25 per kg through retail outlets and mobile vans of NCCF from August 21 in key markets.