Experts believe retailers may take undue advantage of the short supply coinciding with the festive season
Amid the high drama of traders from the largest onion-producing state of Maharashtra protesting against the union government's move to impose a ban on onion exports, experts warn that prices in the retail market may rise.
Experts say retailers are taking advantage of this situation, to make out an artificial scarcity during the festive season, and raise prices even after recovering their expenses. While wholesale prices have fallen, farmers are suffering.
Mandis in the onion-producing region of Lasalgaon, in Maharashtra, have remained closed since Friday demanding that the ban be lifted. On Monday, farmers from major onion-growing districts joined the strike, refusing to bring their produce to the APMC (Agricultural Produce Market Committee) market for auction.
Traders have demanded that the ban on exports be lifted as there is considerable production to cater to the domestic demand and seasonal production is expected to be good.
In the Mumbai wholesale market currently, onions cost Rs12-Rs14, whereas in the retail market it is as high as Rs20-Rs22.
Experts warn that the agitation over the ban on exports will not only result in price rise, but the stored crop may also be allowed to rot.
"The APMC market in Nashik is shut due to the protest. The prices may go up in the retail market," said an official with an agricultural institute.
According to a retail vegetable vendor in Mumbai, the price of onions is at about Rs20-Rs24, depending on the produce. "Nothing can be said about the prices till the protest is on. Meanwhile farmers are suffering and losing out on their produce ," he says.
Ashok Walunj, director at the onion and potato market at APMC, Vashi, told Moneylife, "Wholesale prices are already falling. The government has to lift the ban to stabilise prices."
The Mumbai market is now being supplied by the Pune market. Yesterday, 4,600 quintals of onions arrived at the Vashi APMC.
Meanwhile, politicians are trying to grab political mileage on the export ban issue, with Maharashtra's public works minister Chhagan Bhujbal and some Shiv Sena leaders appealing to the prime minister to urgently withdraw the ban.
Bala Nandgaonkar, MLA elected from Sewree in Central Mumbai, thinks the ban on onion exports should be lifted. "There is adequate production, so it has to be rightly used. Once the domestic demand is fulfilled, exports should be allowed," said the member of the Maharashtra Navnirman Sena, which has a strong local focus in its political strategy.
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