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Wednesday, December 22, 2010

Eyes Watering Over Soaring Onion Prices - Govt Curbs Export

The price of onions has been soaring steadily for the past one month in the city of Mumbai and other parts of the country as well. Starting from Rs 40 per Kg, the price has now gone upto more than Rs 70-80 per Kg. In some parts it is being sold for even as high as Rs 100 per Kg. These soaring prices are definitely affecting the common man and the poor as onion is used as a main ingredient in most Indian cooking, specially in North India. Onion is the food for the poor, as they eat dry rotis with an onion to curb their appetite, when there is nothing else to eat. Not only onions, the prices of vegetables too have gone up so much that it is becoming very difficult for the housewife to manage her kitchen on a tight budget.

Image source:

The unseasonal rains in most parts of the country this year is supposedly the cause for this crisis, as most of the onion crops were damaged. But there is no near end to this crisis in sight as the govt in the state say that things may ease only by January end. Though the govt has taken steps by curbing the export and in fact banned all export of this commodity, onion is now being imported from Pakistan.  They hope that the situation will improve as 25-30 truckloads of onions have arrived at the Wagah border near Amritsar. The centre will decide where this stock should be sent.

Maharashtra is supposed to be the country's highest producer of onions, about 31 lakh tonnes on an average. India is the second highest onion producing country after China and the biggest exporter of this essential commodity.

 Image Source: "Onion prices have helped topple Indian governments in the past."

What's interesting to observe is that in the past, onions have been the cause of toppling the ruling govt. Will this crisis reduce Sonia Gandhi and Manmohan Singh to tears, only time will tell. In the meantime, they need to do something fast to check the horrendous rise in prices of all the essential commodities, that includes vegetables and petrol. The question that arises in the minds of the common people is that there may be foul play, or dirty politics behind this whole crisis. Are the onions being hoarded on purpose by unscrupulous elements? Speculations, speculations...are plenty.

"A food ministry official told reporters that agriculture cooperative major, National Agricultural Cooperative Marketing Federation of India Limited (NAFED), has been stopped from giving fresh clearance to exporters.

"We have decided to suspend issuing no objection certificate (NOC) to onion exporters till Jan 15. A decision has also been taken to double the minimum export price to $1,200 per tonne for those NOCs which are yet to be implemented," the official said.

The official suspected speculative elements behind the price rise." News Report.

"Data sourced from the National horticulture Board (NHB) show that prices of bitter gourd, brinjal, cauliflower and tomato have all risen since November, which is unusual given that supply of vegetables usually rise during winters, which should have been more pronounced this year given that monsoons have been rather good". News Report.

"The rise has been blamed on unusually heavy rains in growing areas, as well as on hoarders and speculators." News Report

"Prices have skyrocketed in recent days to as much as Rs 70 a kg Centre has asked Nafed and other agencies to voluntarily stop exports Agri ministry has doubled export prices of onion, making it uncompetitive In Maharashtra, onion may be distributed through ration shops if stocks run out Summer crop that is harvested towards Jan-end may be only hope." News Report.

It is a common strategy used by the govt to divert attention from other scandals and scams, to start something that will take the focus of the common man to something else that is more important. Is this just a the wake of scams like Adarsh, and 2G and other land scams that have been rocking the state govt of Maharastra for quite some time? 

In the meantime....tears continue to flow.

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