Onion prices slide as export ban takes effect (Roundup)

December 22nd, 2010 - 9:51 pm ICT by IANS  

New Delhi, Dec 22 (IANS) Onion prices, which ballooned to Rs.100 a kg in some parts of India, began sliding Wednesday as a ban on exports took effect and imports were allowed at zero duty in desperate moves to battle a crisis that has put the government in a spot.As onions began entering India from Pakistan, authorities cracked down on hoarders and traders at Delhi’s Azadpur wholesale market — the city’s biggest — and said it led to substantial increase in the availability of onions.

After 123 places were raided in Delhi, wholesale prices dropped to Rs.37 a kilogram, the city’s Food and Supplies minister Haroon Yusuf told reporters. But in parts of the capital, the retail price was still as high as Rs.70.

The fall in prices was reported from all over India.

This was most noticeable in Chennai after the Tamil Nadu government pledged to sell onions at its retail outlets. Onion prices dipped to Rs.50 per kg from a high of Rs.100.

Onion prices that shot up to Rs.75-80 a kg in Karnataka this week were set to decline with more stocks entering the wholesale markets.

The commerce ministry said at least 30 truckloads of onions from Pakistan had reached Punjab Tuesday, and nearly 1,000 tonnes were expected from the neighbouring country over the next few days.

India Wednesday formally notified a ban on onion exports while permitting imports at zero duty with immediate effect.

Earlier, the government had doubled the minimum export price of onions from the country, the second largest onion producer after China.

“In supercession of all earlier notifications on export of onions, it has been decided to prohibit export of all varieties of onion with immediate effect and till further orders,” said a gazette notification.

“The customs duty on onions has also been cut from 5 percent to zero,” Finance Secretary Ashok Chawla told reporters here, even as India started imports from Pakistan started flowing in.

Onion prices went up in retail markets across India after crop failure in the main producing state of Maharashtra due to heavy rains, prompting the government to take a series of measures to increase supplies.

The Prime Minister’s Office intervened Tuesday asking immediate intervention by the consumer affairs department to monitor the situation and take immediate steps to bring down prices.

This followed Agriculture Minister Sharad Pawar’s alarming prediction that the prices would not come down for about three weeks.

The crackdown in Delhi came a day after Chief Minister Sheila Dikshit vowed to track down the hoarders. Karnataka moved to control onion prices.

“The sudden export ban and fear of government intervention, including raids, are forcing growers and intermediaries to bring their onion stocks into the wholesale market,” Horticultural Producers Cooperative Marketing and Processing Society Ltd chief K. M. Parashivamurthy told IANS.

“With supplies increasing, we will see a gradual decline in the prices in the retail outlets,” he said.

“We are pricing onions at Rs.60 a kg for Thursday and Friday and may reduce it further if we are able to procure more stocks at lower rates. More than supplies, it is the auction price that determines our retail pricing,” Parashivamurthy said.

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