The authorities may even be offloading its onion shares in varied wholesale markets to scale back retail costs
| Photo Credit: Vijay Soneji
The story to this point: In order to extend the provision of onions available in the market, particularly forward of the upcoming festive season, the federal government on August 19 imposed a 40% duty on the export of onions till the top of the yr. Elaborating on the rationale behind the transfer, Rohit Kumar Singh, Secretary on the Department of Consumer Affairs, mentioned that a “sharp rise” in its exports had been noticed within the current previous. Besides imposing this duty, the federal government may even be offloading its onion shares in varied wholesale markets to scale back retail costs. As per the Department of Consumer Affairs’ Price Monitoring Division, on August 25, the (all-India) each day common retail value of onions was 25% greater on a year-on-year foundation, at ₹32.6/kg.
Also learn | Onions to be made accessible at ₹25 as buffer inventory burgeons
What do the measures search to attain?
The two measures are geared toward infusing shares into the market to stabilise costs and mitigate the demand-supply mismatch. The chain of occasions goes again to February, which skilled higher-than-normal temperatures. This was adopted by unseasonal rainfall between late March and early-April. The two climatic occurrences corresponded with the expansion cycle of the onion crop.
Onion crops are grown in India throughout three seasons, particularly kharif, late kharif and rabi. The kharif crop is planted round July-August and is harvested between October and December; the late kharif is sown between October and November and harvested between January and March. Rabi is harvested round finish of March to May and planted between December and January. Maharashtra is the biggest onion-producing State, contributing 39% of the general manufacturing, adopted by Madhya Pradesh at 17%. Other main onion-growing States embrace Karnataka, Gujarat, Bihar, Andhra Pradesh, Rajasthan, Haryana and Telangana. The rabi crop (of onions) contributes probably the most to manufacturing in a calendar yr — market intelligence agency CRISIL’s report earlier this month pegged this at 70%.
As per the primary advance estimates, the manufacturing of onion is pegged at 31.1 MT this yr, down from 31.7 MT in 2021-22. Further, the world beneath manufacturing can be anticipated to be decrease by 7% at roughly 1.8 million hectares.
What led to considerations about storage?
Onions normally develop finest beneath gentle climate situations. The sudden improve in temperature, like in February, led to the early maturity of the crop, which resulted in a small-sized bulb. Further, the unseasonal rainfall in key rising areas throughout March additionally affected the standard of onions and lowered their shelf life from six months by round a month. As per the CRISIL report, this raised considerations about storage and induced panic promoting amongst farmers.
Pushan Sharma, Director-Research at CRISIL Market Intelligence and Analytics, advised The Hindu that every yr India sees a lean interval in the direction of the top of September when rabi shares deplete and the kharif crop is but to reach on the market (by early October). “However, this year, since the rabi crop has seen a reduction in shelf life, the lean season is expected to increase and the rabi stock is estimated to deplete by early September, leading to the current increase in prices,” Mr. Sharma mentioned.
Does India export onions?
India exported about 2.5 million tonnes of recent onions value roughly ₹4,522 crore in 2022-23, as per knowledge from India’s Directorate General of Commercial Intelligence and Statistics (DGCIS). Further, as per knowledge from COMTRADE, it’s the third largest exporter after The Netherlands and Mexico, which command about 15.8% and 11.7% of the market share respectively. India instructions about 10%. Its main export locations embrace Bangladesh, Malayasia, the UAE, Sri Lanka, Nepal, Indonesia, Qatar, Vietnam, Oman and Kuwait.
These international locations are anticipated to be significantly impacted by the 40% duty.
What lies forward?
Last week, the federal government mentioned that the buffer inventory has been enhanced to 5 lakh metric tonnes from three lakh metric tonnes. More importantly, it was knowledgeable that onions from the buffers could be made accessible to retail shoppers at a subsidised charge of ₹25/kg via shops and the National Cooperative Consumers’ Federation of India (NCCF) from August 21. As per the federal government, the measures for focused launch, procurement and imposition of export duty would “benefit the farmers and consumers by assuring remunerative prices to the onion farmers while ensuring continuous availability to the consumers at affordable prices.”
