Onion prices remain firm on supply worries, imports to increase

Economy


Pune: Onion prices are expected to continue their upward trajectory for the next two months as incessant rainfall has damaged the crop and nurseries, which will affect the arrival of the next crop.

As a result, imports are gradually growing via both land and sea borders.

The average wholesale prices are expected to rise further from the current level of Rs 50 a kg.

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This despite recent income tax raids on traders at Maharashtra’s Lasalgaon market.

Tax officials raided the premises of a few large traders in Lasalgaon for two days. In protest, traders kept the wholesale market closed for two days and it is now expected to reopen on Saturday.

The central government has already banned onion exports. Raiding traders at Lasalgaon, the biggest onion market in India, is done every time there is a rally in prices.

In the last couple of years, however, onion prices have ruled higher and fluctuated more at the neighbouring Pimpalgaon APMC than Lasalgaon. The current highest price, for a small quantity but is used for pulling prices upwards, is Rs 60 a kg at Pimpalgaon, as against Rs 50 at Lasalgaon.

“We expect that the market will open on Saturday, which is normally a half working day,” Lasalgaon APMC chairman Suvarna Jagtap said.

Jagtap said due to continuous rainfall, onion nurseries of many farmers were damaged. “Despite having purchased the seedlings, many farmers have been waiting for the rains to stop to sow the seedling,” said Jagtap.

A delay in kharif harvest is likely to keep supplies short for the next two months, said traders.

“Imports have been rising as domestic prices are expected to increase further. There is zero duty on onion imports,” Onion Exporters Association president Ajit Shah said. “However, certain phytosanitary restrictions reduce the pace of imports, especially from Dubai.”



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