Export ban brings onion prices down sharply

Thursday, 23 December 2010 00:01 - - {{hitsCtrl.values.hits}}

Reuters: Onion prices in India fell more than 30 per cent after the government banned exports to rein in the cost of the vegetable, a staple for Indians and sometimes a trigger for voter protests over inflation.

Prices had more than doubled in the past week due to a shortage caused by unusually heavy rain in growing areas.

Discontent about food price inflation is another headache for a coalition government struggling with a slew of corruption allegations and an emboldened opposition.

The agriculture ministry on Monday banned exports until Jan. 15, and will import onions from neighbouring Pakistan, as retail prices jumped to 80 rupees ($1.77) per kg from 35 rupees per kg last week, local media reported.

“The situation will be normal in two to three weeks. Onion prices rose because of rains in Nasik and other onion growing areas,” Agriculture Minister Sharad Pawar told reporters on Tuesday.

“The ban on onion exports should help reduce the prices.”

Average onion prices at the country’s largest wholesale onion trading hub in Lasalgaon, in western Maharashtra state, fell 34 percent after the ban to 2,500 rupees per 100 kg.