Onion hits Rs100 a kg; govt threatens imports, export ban

The government yesterday raised the prospects of imports and an export ban on onions as prices of the popular vegetable shot up to levels of Rs80-90 per kg in most parts of the country, including the national capital, and hit the Rs100-a-kg mark in Patna yesterday.

Onions were selling between Rs60 and Rs80 in other parts of the country, including Mumbai and Kolkata, and with limited quantity of fresh arrivals, market watchers expect prices to rise further over the coming week.

The second price spike in just over a month's time has unnerved the authorities and an official said the government was planning a ban on onion exports to contain rising prices.

''Onion prices have gone up sharply. We are considering banning exports as there is not much scope to raise minimum export price (MEP),'' a senior government official said. The current minimum export price for onion is $900 per tonne.

The spiralling prices of onions has become more political issue than an economic one for the Congress-led UPA government as five states are set for polls in December and general election is due early next year.

Commerce minister Anand Sharma attributed the spurt in onion prices to the shortfall in khariff production following damage to crop due to untimely rains.

However, the minister said the country has enough stocks to meet the current requirements and more supplies are expected in the coming months.

''We have enough onion stock in the country. The state governments must act firmly against hoarders who are hoarding onions leading to the artificial scarcity and sharp escalation of prices,'' Sharma told reporters in Delhi.

However, the National Horticultural Research and Development Foundation (NHRDF), a government-run research body, said onion supplies in the country are currently less than 50 per cent of the country's monthly estimated total demand of 9-10 lakh tonnes.

The stored onions have also got exhausted now, adding to the price volatility.

Retailers attributed rising prices of vegetables to ''short supply'' from Barh, Bakhtiarpur, Samastipur and Patna city areas, where Cyclone Phailin caused heavy damage to crops. However, insiders say that the prices have been jacked up by wholesalers who are trying to earn a fast buck by hoarding in the festive season.

India, which consumes nearly 90 per cent of the total onion production and exports 10 per cent, produced 16.3 million tonnes of onion last year.