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As onion prices rise to Rs 70-80 per kg, Centre considering to impose stock limits

The Centre is taking several steps to boost supply, still the onion prices are on the upward swing.

SNS | New Delhi |

The central government is thinking about imposing stock limits on onion traders as the retail prices of the key kitchen ingredient have shot up to Rs 70-80 per kg in Delhi- NCR and other parts of the country due to supply problem because of incessant monsoon rains in the areas where it grows the most, according to sources.

According to the Ministry of Consumer Affairs data, last week retail prices of onion rose to Rs 57/kg in Delhi, Rs 56/kg in Mumbai, Rs 48/kg in Kolkata and Rs 34/kg, and Rs 60/kg in Gurgaon and Jammu.

But the retail onion prices shoot up to Rs 70-80 per kg, at the weekend, according to trade data. The onion prices were Rs 50-60/kg in the previous week.

The Centre is taking several steps to boost supply, still the onion prices are on the upward swing.

“The government has taken several measures in the last few weeks to improve the domestic supply and check further increase in prices of onion. However, retail prices have suddenly shot up in the last 2-3 days because of supply disruption due to excess rains in the growing states,” a source told PTI.

The source further said, “It is a short-term supply disruption and if the situation does not normalise in the next 2-3 days and prices rise, then the government may consider seriously imposing stock holding limits on onion traders.”

States like Maharashtra, Karnataka, Andhra Pradesh, Gujarat, eastern Rajasthan and western Madhya Pradesh known for onion production have received excess monsoon rainfalls in the last two days, according to the Meteorological Department.

Right now, stored onions are sold in most parts of the country.
According to traders, at the moment stored crop is sold in the market and fresh ‘kharif’ crop will hit the market from November onwards. There is enough stock of onion from last year’s crop but its transportation has been affected due to torrential rainfall.

At Asia’s largest onion market is Lasalgoan in Maharashtra onion prices rose to Rs 45/kg last week, when compared with less than Rs 10/kg last year.

The measures taken by the Centre to put a break on rising onion prices in Delhi and other parts of the country-

• It is offloading onion from its buffer stock through agencies like Nafed and NCCF which are selling at around Rs 22/kg and state-run Mother Dairy at Rs 23.90 per kg in Delhi.

• The participating state governments like Delhi, Tripura and Andhra Pradesh have been asked to boost supply in their states lifting central buffer stock.

• The Centre has a buffer stock of 56,000 tonnes of onion, of which 16,000 tonnes has been offloaded so far. In Delhi, 200 tonnes a day is being offloaded.

• It has discouraged export of onion by increasing the minimum export price and withdrawing incentives.

• It is also cracking down on blackmarketeers.

The price index of onions has shot up by around 50 per cent due to uneven distribution and supply in the wholesale markets across the country, following floods in major supplying states such as Maharashtra, Karnataka and Madhya Pradesh.

Last week, in a bid to control the rising prices of onion, the government reduced the minimum export price of the vegetable to $850 per tonne.

The trader said that currently, no wholesale market is receiving more than 1,000-1,500 onion-laden trucks, due to which the prices are going upwards.

Onion prices have also been affected due likely fall in ‘kharif’ production of 2019, because of less planted area under onion on account of excess rains, the sources added.

(With PTI inputs)