The government on Saturday imposed an export duty of 40% on onions with immediate effect to check price rise and improve supplies in the domestic market. This export duty is valid till December 31, 2023.
As per the data by the consumer affairs ministry, the all-India average retail price of onion was ruling at Rs 30.72 per kg on Saturday, with a maximum price at Rs 63 per kg and a minimum at Rs 10 per kg. Rating agency Crisil in its report on August 4, had warned that onion could be next tomato and the retail price might touch Rs 60/70 per kg by month-end.
The onion prices continue to rise this month and experts were saying that prices are likely to rise more in September.
Beating past records, the Centre has procured 2.50 lakh tons of onion for the buffer in 2022-23. However, despite the ample stock of onions in the country, a high proportion of bad quality onions due to a prolonged period of excessive summer heat this year has made good quality onions expensive.
At the same time onion exports jumped 64 per cent in volumes to hit a six year high at 25.25 lakh tonnes during 2022-23.
India’s annual retail inflation rose sharply to a 15-month high of 7.44% in July from 4.87% the previous month, fuelled by a sharp jump in vegetable and cereal prices. The figures breached the upper end of the RBI’s inflation band of 2%-6% for the first time in five months.
High-frequency food price data for August so far shows prices of cereals and pulses continued to increase this month, according to the bulletin. Tomato prices, on average, registered a further increase, although more recent data indicates some pullback in prices, the RBI added.
Onion and potato prices also registered sequential upticks, Reserve Bank of India said in its August bulletin said.
Earlier, ET reported that prices of quality onions used by household consumers are set to nearly double to Rs 55-60 per kg by September, quoting traders.
Despite ample stock of onions in the country, a high proportion of bad quality onions due to a prolonged period of excessive summer heat this year has made good quality onions expensive, they said.
Besides the large proportion of bad quality onions, high inflation in other vegetables is also responsible for propelling onion prices upwards, said traders.
