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Feb 01, 2013 at 10:19pm IST

Onion prices up by 57 per cent, MEP may be re-imposed

New Delhi: Onion prices have shot up by 57 per cent to Rs 22 per kg in the last one month in the wholesale market of Nashik - a major producing centre - on higher demand forcing the government to consider steps to control prices. The price rise is, however, more than five-fold compared to the same month in 2012. In most retail markets across the country, onion is selling at Rs 35-40 per kg.

"The rising domestic price is a concern," a senior Commerce Ministry official said. An inter-ministerial meeting at joint secretary level took stock of the situation and discussed steps to control domestic prices by curbing exports. It also discussed about re-imposing the minimum export price (MEP), sources said. The government had earlier scrapped MEP on onion in June 2012 to boost exports.

Meanwhile, a senior official of the Nasik-based National Horticultural Research and Development Foundation (NHRDF) attributed the rise in wholesale prices of onion to higher demand and increased cost of production. Arrival of the bulb is at 2012's level, the official said. The domestic demand has risen by 10 per cent, while domestic production is expected to be at last year's level of 174 lakh tonnes despite drought in key growing states, especially Maharashtra and Karnataka, the official said.

Reacting to the increase in onion prices, Agriculture Minister Sharad Pawar said: "As far as I know, the coming weeks will be good for Madhya Pradesh, Rajasthan and Gujarat. So, there might be an improvement in the current situation." On Thursday, Delhi Chief Minister Sheila Dikshit had written a letter to Pawar seeking "urgent" intervention to curtail export of onion, a politically sensitive commodity.

According to NHRDF data, wholesale price at Lasalgaon in Nasik, Asia's largest onion market, stood at Rs 22 per kg on Friday, as against Rs 14 kg a month ago and Rs 4.13 in the year-ago period. Maharashtra, Karnataka and Gujarat are the top three onion growing states in the country which suffered drought.

(With additional information from PTI)