The Story Background:
Onion selling at Rs.100 Per Kg. in India is not for the first time. Sharp fluctuations in the price of onion are very common in India.
However, India being an agricultural country still need to import Onion is difficult news to digest. Hence we searched in detail to find the reason.
Some, Natural Reasons
India is the second-largest producer of onion in the world. Maharashtra contributes around 34 %, Madhyapradesh 16% and Karnataka 11% to the total onion production of the country. This year due to heavy rainfall, and flood situation in all these 3 major contributor states, Kharif crop harvesting, which is generally done in Oct-Dec. is reduced and delayed significantly. Therefore only 8 Lac ton onion arrived in the market during Oct, which is less than the average of 2013 to 2018.
India is also the exporter of Onion and till August 2019, it exported 13.62 Lac tones onions. However, due to the shortage in the market, price increased by 2.5 times in this Sept-Oct. as compared to Sept-Oct.2018. And to control it, the government banned the onion exports and also imposed stock limits on traders, to prevent stock storage by traders. And then Central Govt. decided to import 1.2 lac tons of onions to improve domestic supply and to keep prices in control.
But, what is mischevious?
From the above info itself, we can analyze that the country which is exporting one product till August, have to start importing the same product 2 months down the line that is from November. This clearly shows mismanagement in crop handling and lack of proper Export strategy. Problem and delay in Kharif crop harvesting is a regular problem which India faces, but we can not form a proper strategy to manage that.
And who gains, who looses?
Due to the increase in onion price to 100 Rs.per kg., farmers, retailers or wholesalers may benefit. But everyone has their own story. Like imposed stock limits and an immediate ban on exports may affect the earnings of the farmer. If the wholesale trader is allowed to stock up to 500 quintals and retailers up to 100 quintals, farmers couldn’t sale the total onion produce in the market. It means they have to stock it, resulting in quality deterioration leading to the reduced sale price.
But its always that due to such mischievous onion strategy, the consumer loses at the end!
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