Rise in onion prices: Central team visits Lasalgaon, market fears imposition of stock limit

NEW DELHI : In view of the continuous rise in onion prices, a team of senior officials from the department of consumer affairs visited the wholesale onion markets in Nashik district. Market sources in Nashik fear that the central government might try to reimpose stock limit on the bulb by bringing it under the Essential Commodities Act, 1955.

Wholesale prices of onion have crossed the Rs 4,000 per quintal mark across the major markets of the state. At Lasalgaon’s wholesale market in Niphad taluka of Nashik, the average traded price of the bulb on Monday was Rs 4,200 per quintal — a slight correction from the Rs 4,700 per quintal prices of last week. Delay in arrival of kharif crop in Karnataka and an overall dip in the onion acreage across Maharashtra due to the drought of last year has pushed up the prices.

Jaydutt Holkar, chairman of the Lasalgaon’s wholesale market, said the central team has inquired about the reasons for price hike in the market. “The team wanted to know if the present spike in prices is due to the middle men trying to artificially hike up the prices,” he said. Holkar also said the team talked about the storage of onions and whether farmers or traders are holding the produce. “At the present rates, traders are unlikely to hold onto their stocks — most of the produce is with the farmers,” he said.

Market sources, however, say they fear an imposition of stock limit on the bulb. Under the Essential Commodities Act, the central government can impose a stock limit on produces to prevent hoarding. In 2014, a similar stock limit was brought into force for onion, which was lifted in March 2018. Farmers and traders have always protested against the markets imposing a stock limit on onions, claiming that such interventions only bring down prices.

Earlier this month, the government had virtually canned all exports by imposing a steep Minimum Export Price (MEP) of $850 per tonne and also floated tenders for import of 2,000 tonnes of onions. The new onion is expected to reach India towards the end of November to coincide with the arrival of the new crop in Maharashtra.

Meanwhile, arrival of new onions in Andhra Pradesh has picked up, which has cooled down the prices in the south Indian states. The new crop from Karnataka, which was expected to arrive early in September, was also delayed due to heavy rain, which lashed the state in the first few weeks. Maharashtra’s new crop is also delayed by a month or so due to the late arrival of the monsoon. The present price range is expected to remain till arrivals do not pick up from the onion growing areas.