ibnlive » India

Jan 24, 2011 at 11:30pm IST

Nashik: Falling onion prices a positive sign?

Nashik: The aam admi's onion tears could soon be wiped out. At Lasalgaon, India's largest wholesale onion market, prices of the bulb suddenly crashed from last week's Rs 35 per kg-Rs 40 kg to Rs 13 per kg-Rs 15 per kg on Monday. But farmers are agitated. They boycotted the market in the morning hours fearing losses due to the ban on onion exports.

The government had in December banned onion exports till January 15, but with prices still hovering around the Rs 40 per kg mark across the country, the ban hasn't been removed. The farmers' protest now leaves the government in a quandary.

Certain questions add to the government's dilemma over onions. What if lifting the export ban triggers another supply crunch driving up prices? Though supplies have improved with a fresh crop arriving, is it enough meet domestic demand? What if the cartel of traders gives preference to exports over domestic demand?

Out of all those dilemmas, the question of lack of government control over the supply chain of onion traders is the most serious one. Even if the supply improves the trader cartel could very well hand out the rough end of the stick to both farmers and the consumers. It's now for the government to ensure that the slump in wholesale prices is reflected in the retail rates too.