The government expects onion prices to fall below Rs 40 per kilogram by January from the current average price of Rs 57.02 per kilogram, Consumer Affairs Secretary Rohit Kumar Singh said on Monday.
Last week, the government banned onion exports till March next year after the retail sales price of the kitchen staple crossed Rs 80 per kg in the national capital and the prices in mandis remained around Rs 60 per kg.
To a query on when the onion prices are expected to fall below Rs 40 per kg, Singh said, “very soon January”.
“Somebody said it will touch Rs 100 per kg, we said it will never cross Rs 60 per kg. So, all India average is now Rs 57.02 per kg this morning and it will not cross Rs 60 per kg,” Singh said on the sidelines of the ‘Deloitte Growth with Impact Government Summit’.
The export ban will not affect the farmers and it is a small group of traders who are exploiting the differential between prices in Indian and Bangladesh markets.
“They (the traders who were exploiting differential prices) will lose. But who will gain, (it) is the Indian consumer,” he said.
Onion inflation in the Consumer Price Inflation (CPI) basket has been in double digits since July, rising to a near four-year high of 42.1 per cent in October.
Between April 1 and August 4 this fiscal, 9.75 lakh tonnes of onions have been exported from the country. The top three importing countries in value terms are Bangladesh, Malaysia and the UAE.
Onion prices have started inching up amid reports of lag in onion coverage in the ongoing kharif season.
Prior to banning exports, the Centre, in October, decided to step up the sale of buffer onion stock at a subsidised rate of Rs 25 per kg in retail markets in order to provide relief to consumers.
To control prices, the government has taken several steps. It imposed a Minimum Export Price (MEP) of USD 800 per tonne on onion exports on October 28 till December 31 this year.
Also, in August, India imposed a 40 per cent export duty on onions up to December 31.
While the wholesale price inflation in vegetables in October cooled to (-) 21.04 per cent, the annual rate of price rise in onion continued to rule high at 62.60 per cent during the month.