It’s now the flip of growers to be in tears over onion prices, which have plummeted to a five-year low.
This has now led to growers’ organizations such because the Shetkari Sanghatana demanding the Centre to avoid any intervention akin to imposing inventory limits or minimal export value or banning shipments to assist fundamentals to dictate the phrases available in the market slightly than insurance policies.
Lowest in 5 years
Currently, the weighted common modal value (the speed at which most trades happen) is $0,13 a kg, the bottom since 2018, when it dominated at $0,10.
“Government policies over the last 10-20 years are responsible for the current low prices farmers are getting for onion. Farmers are not even able to recover production costs,” mentioned Anil Ghanwat, President, Shetkhari Sanghatana.
Production prices of onion are at the moment $0,18 a kg and one other $0,06 goes in direction of storage. “It is unlikely that onion prices will rise above $0,25 this year. The Centre can help farmers by procuring onion at $0,37,” he mentioned.
Lack of exports demand
One of the explanations for onion prices ruling low at the moment is the lack of demand, significantly within the export market, in accordance to Ajit Shah, President, Horticultural Produce Exporters’ Association (HPEA).
“Export demand for onion is slack on fears of recession. There are other reasons too, particularly the on-and-off ban imposed by India on the bulb’s exports,” he mentioned.
Over the final 5 years, India has banned onion exports at least twice. In 2019 and 2020, the shipments have been banned as home prices in shops soared to $1,25 a kg.
Prices had surged each the years because the onion crop, significantly in Maharashtra, was affected by unseasonal rains.
“For example, Bangladesh used to import a good volume of Indian onions. The bans in 2019 and 2020 have resulted in Dhaka turning to countries such as Turkey and Egypt,” mentioned Shah.
“Bangladesh is now encouraging its growers to produce more onion. It has begun to import onion seeds,” mentioned Ghanwat.
But there may be some hope for Indian onions as floods in Pakistan have affected the crop and this, in flip, may lead to export demand.
“There is demand from Pakistan for Indian onion after floods wreaked havoc, but we do not trade with the neighbouring country,” mentioned Shah.
According to Vikas Chaudhary, an onion trader-cum-exporter in Nashik, some Indian onions are discovering their means into Pakistan. “In fact, prices have improved marginally because of this,” he mentioned.
The Nashik-based trader-cum-exporter mentioned there have been ample shares of onion within the nation and in contrast with that the demand was low. “Usually, prices will tend to rise after Ganesh Chathurthi and they may increase to $0,25-0,31 a kg. Definitely, they will not go beyond $0,50 a kg like last year,” Chaudhary mentioned.
Onion reserve
The Centre has constructed a report 2.5 million tonnes of onion reserve that ensures higher prices to farmers and protects customers from any sudden spike.
“Besides periodic bans, farmers have been affected by raids conducted on traders by income tax and enforcement directorate officials when prices surge, besides the enforcement of stock declaration,” mentioned Ghanwat.
These measures are affecting investments, significantly in developing storage’s. “Currently, whatever storage’s we have to store onion are all owned by growers,” he mentioned.
This 12 months, there are reviews of some farmers shifting to different crops from onion however to this point knowledge to present a transparent image is missing. However, there have been no reviews of any main harm to the crop due to monsoon rains.
“Rains will 100 percent be beneficial to the crop. Any damage to the crop has been limited,” mentioned Chaudhary.
“The kharif onion crop is shaping up good. It is almost ready in Karnataka and Andhra Pradesh. Arrivals are set to begin. Prices could remain at current low levels between $1,25 and $1,63 a kg,” mentioned Shah.
During the 2021-22 crop 12 months that resulted in June, onion manufacturing was estimated at a report 31.70 million tonnes (mt) in contrast with 26.6 mt the earlier 12 months.
“The Centre should at least assure that there will be no intervention from its side in the onion market for growers to get a good price,” mentioned Ghanwat.
Source: India daily mail
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