India: Onion Plunges as Higher Floor Price Hits Export.

Onion prices crashed in markets around growing areas in Maharashtra and Gujarat this week as a higher floor price of $475 a tonne for exports affected shipments and inventories built up at ports due to congestion. “As the Government clamped a ban on onion exports earlier this months, buyers switched over to Pakistan and Chinese onions. It takes an additional three-four days for Pakistani onions to reach Malaysia or Singapore. By the time, the Centre could lift the ban, buyers had placed orders for those onions and our exports have got hit,” said Mr Madan Prakash, Director of Chennai-based Rajathi Group of Companies. “The minimum export price remains at a higher level, affecting exports. Pakistan and China have swarmed markets in Far East, especially Malaysia and Singapore,” said Mr Rupesh Jaju, Director of Nashik-based United Pacific Agro Pvt Lt. Both firms are engaged in exports of agricultural produce.

“Growers feel the shelf life of rabi onions they had stored is coming to an end. Therefore, those onions swamped the market. As a result, the average arrival in markets such as Pimpalgaon, Lasalgaon and Ahmednagar was 1,500 tonnes a day at each place,” Mr Jaju said. “In markets such as Bangalore, nearly 300 trucks are arriving with onion against the usual 150-200. As a result, small onions are now available at Rs 6-7 a kg against Rs 8-10 earlier,” said Mr Prakash. On Friday, onion ranged between Rs 500 ad Rs 1,200 a quintal at Pune Agricultural Produce Marketing Committee yard with the modal price, or the rate at which most trades took place, being Rs 850. Prices are down Rs 250 compared with last week. “Domestic demand is keeping prices from falling. That's why quality onions are commanding Rs 900-1,100,” Mr Jaju said.

“There is congestion of vessels at ports and not much movement of consignments is taking place. This has also contributed to price fall as most exporters have stopped buying,” said Mr Prakash. The situation is likely to improve in a fortnight with regular demand, including from exports, emerging. Meanwhile, the Bombay Exporters Association has asked the National Agricultural Cooperative Marketing Federation to cut the floor price for onion export to $350. “If that happens, exports may rise and in turn, prices could gain,” said Mr Jaju.

Source : freshplaza.com