Onion prices surge again due to short supply

New Delhi: Prices of onion have once again shot up by about 50 per cent from Rs 30-40 per kg to Rs 50-80 per kg 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.

Taking note of the increasing onion prices, the Modi government is mulling imposing stock limits on onion traders. Onion prices are on the rise despite several measures taken up by the ministry of food and consumer affairs to boost supply.

The onion supply is expected to improve in November when new crop will come in the market. 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.

According to the ministry, the retail onion prices rose to `50-60 per kg in Delhi, `50-70 per kg in Mumbai, `45-60 per kg in Kolkata, and `40-50 per kg in Chennai last week. The prices were quoted at `60 per kg in Gurgoan and Jammu during the same period. The retail onion prices were high in affluent colonies across the country.

Right now, stored onions are sold in most parts of the country as fresh Kharif (summer) crop will hit the market from November onwards. Traders said that there is enough supply of stored onion from the previous year’s crop in the country, but its transportation has been affected due to heavy rains.

The government has taken several measures in the last few weeks to improve domestic supply and check further increase in the prices of onion. However, the retail prices have suddenly shot up in the last 2-3 days owing to supply disruption caused by excess rain in the growing states.

Sources said that it is a short-term supply disruption and if the situation does not normalise in the next 2-3 days and the prices rise, the government may consider seriously imposing stock holding limits on onion traders.

According to the Met department, main onion producing regions, especially Maharashtra, Karnataka, Andhra Pradesh, Gujarat, eastern Rajasthan, and western Madhya Pradesh, have received excess monsoon rainfall in the last two days.

The Centre has taken several measures to arrest the prices of onion in Delhi and other parts of the country. It is offloading onion from its buffer stock through agencies like NAFED (National Agricultural Cooperative Marketing Federation of India Ltd) and NCCF (National Cooperative Consumers’ Federation of India Ltd), which are selling onion at about `22 per kg and the state-run Mother Dairy at `23.90 per kg in the national capital.

The Centre has also discouraged export of onion by increasing the minimum export price and withdrawing incentives. It is also cracking down on black marketeers.