HYDERABAD: After tomatoes, the prices of onions seem to be soaring. They have increased by over 50 percent in the past two weeks. This steep rise is attributed to the escalation of prices in Maharashtra, which is the main exporter of onions to Telangana. What was previous being sold for Rs 12 to Rs 20 per kg is now being sold for Rs 18 to Rs 25 per kg. In Maharashtra, the prices of onions have increased by 118 percent over the last two weeks. They are expected to increase another 20 percent in the near future. Reports of the Centre not having created any buffer stocks of onions to control prices this year have contributed to the rise. The State Government has also failed to stock up on onions in anticipation of a bumper crop this season. Last year, the State Government had procured nearly 10,000 tonnes of onions from Maharashtra and Karnataka at Rs 10 per kg, to check the price rise. However, the Government suffered losses after nearly 30 percent of the buffer stocks were damaged or destroyed due to the lack of proper storage facilities.
Additionally, prices fell to less than Rs 5 per kg due to excess production and surplus supply from neighbouring states, which added to the losses. To avoid drawing up losses again this year, the State Government decided not to stock up on onions. According to officials of the Marketing Department, onion prices are expected to stay at their current levels, with perhaps a marginal increase, until mid-September. After that, a fresh harvest is expected from Karnataka and AP, followed by Maharashtra.
They say that the Centre is likely to impose a Minimum Export Price (MEP) on onions, to control the rising prices by discouraging exports to other countries. The MEP for onions used to be $700 per tonne. In December 2015, after a crash in the wholesale prices of onions, the Centre got rid of the MEP. For the past 19 months, there has been no MEP applicable on onions. Now, the Centre plans to re-introduce the MEP, if prices continue to rise over the next few days.
