Onion price hike to MVR 400 linked to India's price, export controls
India is the world's largest exporter of onions.
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By
Ahmed Mizyal
The price of a sack of onions in the market has risen above MVR 400 recently. According to businessmen, this is just the beginning of the price increase. The price hike is linked, they say, to the price hike in India, which exports onions to Maldives.
"The next loaded shipment will be even more expensive. A sack will cost more than MVR 500," said a trader selling groceries at the top of the market.
Traders say onion prices are not expected to fall in the near future.
The price of onion is currently between MVR 18 and 22 per kg in the market. Although it is still available in stores at about the same price, all traders say prices will continue to rise.
As far as neighbouring India is concerned, it is difficult to get onions in India as well. With this, onion prices in India have also gone up significantly and the central government has taken steps to control prices.
Retail prices of onions in India are almost double as compared to the previous year. According to media reports, onion, which was earlier sold at Rs 40 per kg in the capital Delhi, is now hovering around Rs 65-80 per kg. If steps are not taken to control the prices, there is a possibility of onion prices going up to Rs 150 per kg, according to a report in the foreign media quoting authorities.
Here's how the central government is working to control onion prices in India:
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India to raise minimum onion export price by USD 800 per tonne
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The change will come into effect by the end of this year
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Earlier in August, excise duty on onion exports was hiked to 40%
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The Government of India has procured 200,000 tonnes of onions to keep the price of onions in the market in check and will sell them at lower prices.
Reasons why onion prices are rising in India
According to foreign media reports, onion prices in India have started rising in the middle of this year.
The main reasons for this are as follows:
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Delay in availability of onion stocks in some states and fall in the quantity of stored onions
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Decline in onion production in some states and especially in the southern states
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Apart from the low rainfall in the summer season and the delay in onion production due to El Nino, there have also been issues such as poor onion quality and rapid decay.
Despite these constraints, India exported 1.46 million metric tonnes of onions in the first six months of the current fiscal. This is an increase of 63% over the same period last year.
India is the world's largest exporter of onions.
