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Govt rules out banning onion export

March 13, 2013 15:36 IST

The government on Wednesday ruled out banning export of onion saying the spurt in domestic prices was "temporary" caused by unseasonable rains and market closures.

"We have adequate stocks (of onion). We have no shortage and position is as such comfortable," Commerce Minister Anand Sharma said during Question Hour in Rajya Sabha.

Only surplus production after taking into account all of domestic consumption, is allowed to be exported, he said, adding domestic production of onion at 17 million tonnes is more than the demand of about 15 million tonnes.

"The export policy of agricultural produce depends on various factors including availability of surplus over and above the requirement of buffer stock including strategic reserves," he said.

Out of the total onion production in the country, 84 per cent was consumed domestically and six per cent is used for creating buffer stock. Only 7 per cent is exported, he said.

"We cannot abruptly stop exports," he said, citing sovereign supply commitments that may have been made. Besides, stopping exports would mean yielding the space in international commodity market to rivals.

Rains in Rajasthan and Madhya Pradesh as well as closure of Azadpur Mandi in the national capital for four days led to "temporary spurt" in prices in January/February.

"The temporary spurt in the prices beginning from January 22 continued for a fortnight and have since stabilised. The wholesale price in Azadpur Mandi in Delhi on March 11 was Rs 13.10 per kg," he said.

He, however, admitted that the retail price may be higher by up to Rs 10-11 per kg because of number of intermediaries involved.

"We have to reduce number of intermediaries to cut prices," Sharma said, adding the government keeps a sharp eye on prices and plans interventions in cases of abnormal price changes.

He said there was need to build infrastructure, cold storages and agro-processing industry to generate employment and attract investment.

Sharma said the Delhi Chief Minister had on January 31 written to Agriculture Minister saying rise in onion prices was due to short supply. The Chief Minister called for curtailing export of onions to prevent further rise in prices.

"In case of onion, government has set up an inter-ministerial committee (IMG) comprising of representatives of Ministry of Commerce, Ministry of Agriculture, NAFED and Department of Consumer Affairs which regularly takes stock of the arrival of onion and modal prices prevailing in the important production and consumption centres," he said.

The IMG met thrice in February to review the situation, he added.

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