Govt acts on onion prices; raids hoarders, withdraws custom duty

Mtoday news

New Delhi, December 22: With onion prices skyrocketing to as much as Rs 85 per kg in some retail markets, the government in the Centre on Wednesday said it has brought down customs duty on imports of the commodity to zero from 5 percent.

"The customs duty on onions has been brought down to zero," Finance Secretary Ashok Chawla told reporters here today.

Meanwhile, acting against the hoarders, authorities have conducted raids in Delhi’s Azadpur and Ghazipur wholesale markets.

The step comes amid a sharp rise in the price of onions up to Rs 70-85 per kg in retail markets across the country from just Rs 35-40 a few days ago on account of damage suffered by crops in the key-producing states of Maharashtra, Gujarat and a few Southern states due to excessive rains, which has led to large-scale hoarding by some traders.

The steep hike in onion prices set alarm bells ringing in the government, which has imposed a ban on onion exports till January 15, 2011, with a view to increase availability in the domestic market. However, it is likely to take at least three weeks before the common man gets any relief from the measure.

"Onion prices will remain high for the next 2-3 weeks and the situation is likely to improve only after that," Food and Agriculture Minister Sharad Pawar said yesterday.

 While Pawar had indicated the government did not have any plans to import onions to bring down prices at home, small 450-tonne consignments of the commodity from neighbouring Pakistan have been making their way into the country across the Punjab border since yesterday.

Compared to the exorbitant domestic prices, the price of the onions imported from Pakistan is just Rs 18-20 per kg.

A worried Prime Minister Manmohan Singh, whose government has been grappling with high inflation for much of the past year, has also stepped into the picture and asked the agriculture and consumer affairs ministries to take effective steps to rein in onion prices.

"The Prime Minister desires all necessary steps to effectively deal with the extraordinary price rise of onions and bring the prices down to an affordable level," an official source said, quoting letters written by Singh to the ministries concerned.

 

New Delhi, Dec 20:  Earlier the  government decided to suspend onion exports till January 15 in the wake of skyrocketing prices of the commodity which is selling between Rs. 60-70 a kg.

 

Agriculture cooperative major Nafed, a regulating agency, has been asked to stop giving fresh clearance to exporters. The government has also made exports almost impossible for those who are already in possession of ’no objection certificate’ (NOC) given by the Nafed and 12 other agencies.

It has more than doubled the minimum export price (MEP) to USD 1,200 per tonne from USD 525, meaning no shipment can take place below this price.

"We have decided to voluntarily suspend issuing NOC to onion exporters till January 15 and have also raised the MEP to USD 1,200 dollars per tonne for those NOCs which is yet to be executed," an official said.

The decision to suspend exports was taken at an emergency meeting of Nafed held today.

Onion prices have soared to Rs. 60-70 per kg in the retail markets across the country from Rs. 35-40 a couple of days ago.