On Monday, Consumer Affairs Secretary Rohit Kumar Singh announced that the government anticipates a drop in onion prices to go below INR 40 per kilogram by January, down from the present average of INR 57.02 per kilogram.
Last week, the government banned onion exports until March next year after the retail sales price of the kitchen staple crossed INR 80 per kg in the national capital, with mandi prices remaining around INR 60 per kg.
In response to a question about when onion prices are anticipated to drop below INR 40 per kilogram, Singh stated, “It will happen very soon, in January.”
“Somebody said it will touch INR 100 per kg, we said it will never cross INR 60 per kg. So, all India average is now INR 57.02 per kg this morning and it will not cross INR 60 per kg,” Singh said on the sidelines of the ‘Deloitte Growth with Impact Government Summit’.
The restriction on exports will have no impact on farmers; instead, a limited number of traders are taking advantage of the price difference between the Indian and Bangladesh markets.
“They (the traders who were exploiting differential prices) will lose. But who will gain, (it) is the Indian consumer,” he said.
Onion inflation within the Consumer Price Inflation (CPI) basket has consistently been in double digits since July, reaching a nearly four-year peak of 42.1 percent in October.
From April 1 to August 4 of this fiscal year, the country has exported 9.75 lakh tonnes of onions. In terms of value, the top three importing countries are Bangladesh, Malaysia, and the UAE.
Onion prices are gradually rising due to reports indicating a delay in onion coverage during the current kharif season.
Before implementing the export ban, the Central government, in October, opted to increase the distribution of buffer onion stock at a subsidized rate of INR 25 per kg in retail markets to offer relief to consumers.
To regulate prices, the government has implemented various measures, including the imposition of a Minimum Export Price (MEP) of USD 800 per tonne on onion exports from October 28 to December 31 this year.
Additionally, in August, India enforced a 40 percent export duty on onions until December 31.
While the wholesale price inflation in vegetables eased to (-) 21.04 percent in October, the annual rate of price increase in onions remained elevated at 62.60 percent during the same month.
