The Union Government's ban last week on onion exports has created an explosion of protest in Maharashtra where the onion mandis have remained closed since Friday, with farmers and traders incensed at the move.
The protest, on Monday, spread to all four onion-producing districts in Maharashtra, with farmers refusing to bring their produce to auctions at the various Agricultural Produce Market Committee (APMC) yards.
The APMC yards have decided to keep the markets closed indefinitely.
According to Mr Babanrao Kale, Vice-President, Shetkari Sanghatana, following the ban, onion prices have fallen to less than half of the production price determined by the State Government body for prices of agro produce.
“Last week, the Agricultural Price Cell informed us that the cost of onion production was Rs 800 a quintal,” he said, adding that this figure was based on a study conducted by a college under the Marathwada Agricultural University.
“Onion stocks are considerable and exports have been much less compared with the previous year. It is surprising that an export ban comes at such a juncture,” said Mr C.B. Holkar, Vice-President of National Agricultural Cooperative Marketing Federation of India (NAFED).
Stocks piled
There are stocks of 6-7 lakh tonnes from the summer crop currently lying with farmers and traders.
Exports as at August-end this year amounted to only 5,30,000 tonnes against 9,40,000 tonnes in the corresponding period last year, he said.
“Not only will prices fall if exports are banned, but the unsold stocks will rot; at least 50-60 per cent of the stock will rot if kept beyond six months,” said Mr Holkar.
Minimum export price
Even without the ban, onions exports are already lower this year because of the high minimum export price of $475 a tonne f.o.b which makes India uncompetitive in export markets.
The MEP was $300-350 a tonne the previous year, he said.
“We were surprised at the ban,” said an industry expert with a Union Government agency. Neither the wholesale price nor the consumer price was that high as to warrant an export ban, he said.
The modal price or the rate at which most trades took place in Lasalgaon, the largest onion market in Asia, on Friday was only Rs 1,000 a quintal. In Delhi and Chennai, it was a little higher at Rs 1,233 and Rs 1,500 a quintal, respectively on Friday.
“Retail prices at between Rs 15 and Rs 20 a kg are not all that high either,” said the expert.
Losses
Even at Rs 1,200 a quintal many farmers are making a loss of Rs 100 to Rs 150, said Mr. Holkar.
Following the ban, the prices of the bulb which ranged from Rs 1,200-1,400 a quintal prior to the ban had dropped to Rs 350-600 a quintal, Mr Kale said.
The industry expert alleged that retailers were possibly trying to exploit the situation ahead of the festival season, so that spoilt stocks would lead to a shortage, leading to higher prices and margins for them.
The Maharashtra Agriculture Minister, Mr Radhakrishna Vikhe-Patil, visited protesting traders and farmers in the Nashik area on Monday.
Maharashtra is the largest onion producer in the country, and Nashik accounts for more than half of the onion harvests in the state.