India increased its export taxes on onions by 40 per cent as a result of a three-year peak in onion exports. Wholesale onion prices have increased gradually in numerous marketplaces.
Due to insufficient storage and supply, onion prices at Lasalgaon, the main wholesale market in Maharashtra’s Nashik district, increased from Rs 1,000–1,100 per quintal to above Rs 2,200–2,300 per quintal in early August. Onions have been seen being offered around Rs 30-35/kg at retail markets.
Exporters and merchants are nonetheless dubious about the export duty’s ability to curb domestic price inflation given that there is not enough local output to satisfy market demand.
Due to a three-year export high, India hiked its export duties on onions by 40 per cent. This decision has been made as wholesale onion prices have risen in many markets.
Early in August, onion prices at Lasalgaon, the primary wholesale market in Maharashtra’s Nashik region, rose from Rs 1,000–1,100 per quintal to around Rs 2,200–2,300 per quintal due to insufficient storage and supply. At retail markets, onions have been observed to be priced at about Rs 30-35/kg.
Despite this, exporters and merchants are sceptical about the export duty’s potential to restrain domestic price inflation because there isn’t enough domestic production to meet market demand.
The present import duty of 40 per cent, according to Suresh Deshmukh, a commission agent at the Dindori wholesale market, would make exports unprofitable and have an effect on prices both domestically and internationally. Although the demand from Bangladesh and the Middle East is still high, the new duty structure may prevent exports, which will have an impact for domestic prices.
Farmers in Nashik had previously blamed the price increase on a 40 per cent loss brought on by quality problems during storage. They pointed out that, in light of significant losses brought on by unfavourable weather, the current pricing just covered production costs.
The cultivation of onions was negatively impacted by unseasonal rainfall and a dry spell in the previous year, which were followed by heat, resulting in decreased yields and poor quality.