Onion Prices Surge by 20 Percent After Government Eases Export Restrictions

The central government's decision to remove the minimum export price (MEP) of $550 per ton on onions and reduce the export duty from 40% to 20% has had a noticeable impact on onion prices. As a result, prices in Lasalgaon, Nashik’s largest wholesale onion market, have surged by around 20%. According to the Department of Consumer Affairs, as of September 20, the average retail price of onions in India was ₹52.52 per kg, while the average wholesale price stood at ₹44.45 per kg.

In Maharashtra’s markets, the average wholesale price of onions, which was between ₹3,000 and ₹3,500 per quintal a week ago, has now exceeded ₹4,000 per quintal, bringing much-needed relief to farmers. The export restrictions had severely affected farmers, particularly in Maharashtra’s onion belt, leading to visible discontent during the Lok Sabha elections. With the state assembly elections approaching, the government’s move to lift the MEP and reduce export duties appears aimed at pacifying the aggrieved farmers.

Bharat Dighole, President of the Maharashtra State Onion Producers' Association, told Rural Voice that the removal of the MEP and reduction in export duties led to a sharp increase in onion prices. Demand for onions has surged, resulting in a price recovery. On Friday, the average price of onions in the Lasalgaon market was ₹4,650 per quintal, compared to ₹3,600 per quintal a month ago, and prices are expected to rise further.

Anil Ghanwat, leader of the Shetkari Sanghatana and a member of the Supreme Court-appointed committee on MSP, mentioned to Rural Voice that farmers are now receiving better prices. With onion prices ranging between ₹4,000 and ₹5,000 per quintal, this upward trend may continue through next month. However, he expects prices to decline by the end of October as the new onion harvest reaches the markets.

The rise in wholesale prices has also affected retail markets, where onion prices have jumped from ₹50 per kg to ₹65-70 per kg in just one week. To alleviate pressure on consumers, the central government has begun selling onions at subsidized rates through cooperative organizations NAFED and NCCF. In cities like Delhi and Mumbai, onions are being sold at ₹35 per kg.