Onion Price Hike: Government To Consider Stock Limit On Traders
Workers sort onions at the Agriculture Produce Market Committee wholesale market in Lasalgaon, Maharashtra, India. (Photographer: Dhiraj Singh/Bloomberg)  

Onion Price Hike: Government To Consider Stock Limit On Traders


The Centre will consider imposing the stock limit on onion traders if retail prices continue to remain high even after exhausting the buffer stock, Food and Consumer Affairs Ram Vilas Paswan said on Tuesday.

The government will "wait and watch" the price situation for some time for imposing the stock limit as it is equally concerned about the interest of farmers, he said.

Agriculture Minister Narendra Singh Tomar also assured that onion prices will calm down in the next few days as supply is being improved in the domestic market by agencies like Nafed.

To give relief to consumers, central agencies Nafed and the National Cooperative Consumers Federation of India have been selling onion from the buffer stock at Rs 22-23 per kg, while Mother Dairy's Safal stores are selling at Rs 23.90 per kg in the National Capital.

Trade data showed that retail prices have shot up to Rs 70-80 per kg in the Capital owing to tight supplies. A similar price trend prevails in other parts of the country.

"We have taken the best possible measures so far to boost supply and contain onion prices. We have to look at other options like stock limit if the current high price situation continues," Paswan told reporters.

He said the government "will think about imposing a stock limit on traders once the buffer stock gets over. We will also take stringent action against hoarders and black marketeers".

The government is doing a "balancing job" keeping in mind the interest of both consumers and farmers, he added.

The centre has built a buffer stock of 50,000 tonne of which 15,000 tonne have been offloaded in the domestic market.

Paswan also shared that he was in regular touch with the Maharashtra chief minister on onion issue.

Echoing the views at another event, the agriculture minister said, "Onion situation will improve in the next few days. Cooperative Nafed is releasing stock from the central buffer at a lower price. We have enough stock of onions."

"At times, consumers have to pay a high price for farm items; and at times, farmers get less price for their produce. Our role is to balance this. We are aware of it and are taking several measures," the minister added.

Onion prices have spiked in the last one month due to supply disruption from growing states like Maharashtra after floods. Rains in the last week further affected the supply, impacting prices.

Stored onion is being sold in most parts of the country now and fresh Kharif (summer) crop will hit the market from November onwards, traders said.

Traders further said that there is enough supply of stored onion of the previous year's crop but its transportation has been affected due to heavy rains.

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 and National Cooperative Consumers' Federation of India.

The state governments have been asked to boost the supply by lifting central buffer stock. Some states like Delhi, Tripura and Andhra Pradesh have shown interest so far. In Delhi, around 200 tonne of onion is being offloaded every day.

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

Prices have also picked up on a likely fall in Kharif production owing to the lower planted area under onion after excess rains, according to sources.

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