Traders on Monday closed onion auctions indefinitely in all the Agriculture Produce Market Committee (APMC) mandi in Maharashtra’s Nashik district, to protest against the government’s decision to impose a 40% export duty on the staple vegetable from Saturday.
They feel the centre’s move to impose export duty on onions till December 31, 2023 will adversely hit prices.
Officials of the APMCs will hold a meeting on Tuesday to chalk out a future action plan.
However, a department of consumer affairs official said that the decision to impose export duty on onions was not a ‘premature’ but a timely move to boost domestic supply and control retail prices.
According to the department of consumer affairs, the modal retail prices of onion rose from Rs 20/kg since the beginning of the year, to Rs 30/kg on Monday. The rating agency Crisil in its report recently has stated that retail onion prices are expected to hit Rs 60-70/kg next month.
Inflation in onion, which had been in the negative zone since September, 2021, rose to 11.72% in July while in June it was reported at 1.65%.
Retail prices of onion have started to rise for the first time in the last couple of weeks after nearly two years due to reports of sluggish kharif sowing on delayed arrival of monsoon in the key producing states of Maharashtra and Karnataka.
High moisture content in the stored rabi crops because of unseasonal rains in April in Maharashtra and Karnataka has reduced its shelf-life of the staple vegetable, causing fears of supply constraints by September.
India exported a record 2.5 million tonne (MT) of onion 2022-23, which is an increase of 65% from the previous fiscal. Bangladesh, Malaysia, Sri Lanka and Nepal respectively had a major share in the onion exports in the last fiscal.
India is the biggest producer of onion and Maharashtra, Madhya Pradesh, Karnataka and Gujarat have more than 70% share in the country’s production.
The estimated production of onion during the 2022-23 crop year (July-June) declined marginally 31.01 MT against 31.7 MT reported in the previous year. The output of kitchen bulbs was 26.64 MT in 2020-21.