Centre imposes 40% export duty on Onion
The duty is imposed with immediate effect and will be valid till December 31, 2023 or as per the next notification by the government. The move is expected to cool the retail inflation as vegetable prices sent consumer inflation soaring to a 15-month high in July, compared with 4.87% in the previous month, breaching the upper tolerance band of the Reserve Bank of India for the first time in FY24. The price hike was led by tomatoes which reached up to Rs 250 per kg in the retail market.
The centre stepped in with subsidised supply tomatoes to rein in retail prices. The RBI governor Shaktikanta Das in the latest monthly “state of the economy” article, warned that the unprecedented shock to tomato prices may spill over to prices of other vegetables. “Headline inflation, after reaching a low of 4.3 per cent in May 2023, rose in June and is expected to surge during July-August led by vegetable prices,” Das said.
As per the data by the consumer affairs ministry, the all-India average retail price of onion was ruling at Rs 30.72 per kg on Saturday, with a maximum price at Rs 63 per kg and a minimum at Rs 10 per kg. Rating agency Crisil in its report on August 4, had warned that onion could be next tomato and the retail price might touch Rs 60/70 per kg by month-end. The onion prices continue to rise this month and experts were saying that prices are likely to rise more in September.
Beating past records, the Centre has procured 2.50 lakh tons of onion for the buffer in 2022-23. However, despite the ample stock of onions in the country, a high proportion of bad quality onions due to a prolonged period of excessive summer heat this year has made good quality onions expensive. At the same time onion exports jumped 64 per cent in
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