The Onion Story....From Competitive Assessment of Onion Markets in India 2012 India is the second largest producer of onion in the world next to China. According to 2010 FAO estimates, India contributes nearly 19.25 percent of world onion production. Though the second largest onion producer, India significantly lags behind in the productivity or yield of the onion. The onion yield in country has improved from 9961 kg per hectare in the year 1980-81 to 15106 kg per hectare in the 2011-12. The large quantity of onion export is also one of the reasons for sudden spurt in the prices of onion during December 2010. Export Statistics: 2011-12 QTY 1552904(MT) Value 214143 (Lakhs) The general pattern of general variations in prices, i.e. lower prices during the post harvesting months and higher prices during the pre-harvest of offseason months is a normal feature for many agricultural commodities and it is repeated year after year. It is big traders operating in both primary wholesale assembling markets and metropolitan city markets who are in position to buy large volume of onion in the post harvest season and tighten the supply through hoarding in lean season of production. The December 2010 price spikes of onion in many ways cannot be explained fully by the fundamentals of demand-supply and hence underscores the need to delve into the agro-market structures and identify the real causes of price volatility in agricultural commodities. The government policies also had a great role in the December 2010 high price episode. The government agencies allowed traders to export 1.33 lakh tones of Onion in October 2010 even though the rain had destroyed a good harvest. Existence of established traders and barrier to new entry: In important onion markets, the commission agents and the traders dealing with onion are well established and have an average experience of 20 years. In Karnataka and Maharashtra, the agricultural marketing is more or less entirely in the hands of the intermediate market functionaries. Both the states do not have strong network of post harvest services, infrastructural facilities & amenities and dynamic marketing system. it was quite clear that traders stored onion in anticipation of higher prices. The collusion in these markets even though is small to affect the prices of the onion at country level but nonetheless underline the inefficiencies in onion markets, and was detrimental to both the consumers and producers. It also gives a signal that how intermediaries control onion trade and prices in the country.
Posted on: Fri, 25 Oct 2013 00:31:55 +0000
Trending Topics
Recently Viewed Topics
© 2015