Therefore, the BJP-led NDA government can’t be faulted for the decision to import onions ahead of important Bihar Assembly election. The retail onion market in North India is sizzling under unprecedently high prices reaching Rs. 80 for a kilo while wholesale prices are hovering around Rs. 5,000 per quintal. The prices may go up to Rs.100 per kg by next month. Rainfall in Maharashtra, the biggest onion grower, has so far been below average.
Somewhat panicked, the government directed the National Agricultural Co-operative Marketing Federation (NAFED) to cancel its global e-tender which it failed to issue in time and, instead, asked the public sector MMTC to import 10,000 tonnes of onions as early as possible. Punjab traders are believed to have already started importing onions from Afghanistan in small quantities through the Attari-Wagah land route. Two to four trucks of onions are entering India daily by this route. Pakistan, China and Iran are among the key onion import sources of India. Paradoxically, India’s onion exports had gone up 25 per cent in May and June, after a four-month slump, because of less competition in destinations such as Sri Lanka and West Asia. The onion trade never witnessed a better export-import opportunity. Smart traders with hoarded onions are having a ball.
Rising onion exports earlier this year helped spurt modal prices in the benchmark Lasalgaon market at Rs 1,300 a quintal in early June as against Rs 1,000 at the beginning of May. As a result, arrivals rose by almost 30 per cent to 13,000 tonnes as export prices surged by $25-50 to $375 within a month. According to reports, data compiled by the National Horticulture Research and Development Foundation (NHRDF) showed, India’s onion exports at 265,066 tonnes between April – May last year. Exports went up by 20-25 per cent this year. India’s annual onion export reached its peak at 1.87 million tonnes in 2009-10. Income wise 2012-13 and 2013-14 proved to be best for traders earning Rs. 2,295 crore and Rs.2,877 crore respectively. Now, India is forced to import onion after persistently exporting the commodity till through the first half of the year.
Interestingly, two years ago in August 2013, the Manmohan Singh government, then reeling under high onion prices ahead of 2014 Lok Sabha election, ordered up to 3,00,000 tonnes of the commodity to minimize the impact of the opposition criticism across the country. India had exported 1.36 million tones of onion, that year. Political parties have won and lost elections in India over the cost of Onion, a key ingredient used to make spicy dishes from curries to biriyani. Few senior politicians have forgotten how Indira Gandhi swept back power in 1980 by turning the price of onions into a populist rallying agenda assailing the incumbent government for its failure to control prices.
Yet, it is difficult to understand why government after government subjected itself to such a situation by freely allowing onion exports in season and not doing enough to improve the storage facility and quality of its product and ensure that only surplus is exported. The fact is India is the world’s second-largest producer of onions after China. India produces about 17 million tones of onions per year though the production is said to be shrinking for various reasons. According to the Bangalore-based Institute of Social and Economic Change, collusion among traders and the poor state of the country’s infrastructure act to push up prices. Traders are also hand-in-gloves with the political party in power exploiting the poor storage facility close to the production centres and the market. Nearly 40 percent of the country’s agri-products, including fruits, get perished due to lack of cold storage facilities and poor transport infrastructure. Both the agriculture and commerce ministries would appear to be responsible for a dishonest trade taking the upper hand in controlling the commodity without contributing much to its development and market stability.
India can easily become a global leader in the onion trade without costing the domestic market by improving quality, raising production by merely 10 per cent and improving storage and transportation facility. Ruling political parties over the years have done little to address these key issues which concern most perishable fruits and vegetables. Instead, they found it easier to side with the trade to partly share their fortunes from both exports and imports. Nobody really knows what would the ultimate quantity of onion import, this year. In its very first year of operation, the Modi government faced onion supply shortage around this time and wanted to import some 70,000 tonnes of the commodity from Pakistan, Iran, Egypt and China. The questions are: why did the government allow export such large quantities of onion and why didn’t it protect the commodity, the market and consumers? The summer onion crop is harvested in April and May. It has a shelf life of six to seven months. Then comes Khariff onion from October. All that industry and trade need to do is to protect the interim period of eight to 10 weeks to ensure market stability under normal circumstances. Unfortunately, this is not happening. (IPA Service)
India
EXPORT ONION CHEAPLY TO IMPORT LATER AT HIGH COST
GOVERNMENT PLAYING IN THE HANDS OF TRADE
Nantoo Banerjee - 2015-08-24 11:50
The onion trade has, once again, taken the government for a ride. The trade was allowed to export well over a million tones of onion through 2014-15 and the first quarter of this financial year. The government, as usual, ignored the production and availability of onion and met forecast of a weak monsoon in May. The Mumbai-market controlled onion trade did what it had been doing for decades – export cheaply during the season and import at high cost at the season-end to maximize profit on both. Few governments, not even the one led by the late Indira Gandhi, had the political courage and will to control, if not stop altogether, onion export and import to stabilize the trade for the benefit of the common man. High onion and potato prices had caused election downfall of ruling parties.