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Govt Cracks on Onion Prices, Allows Faster Imports, Struggles to Keep it Below Rs.40 per kg

Photo Credit: HolgersFotografie (pixabay)

Photo Credit: HolgersFotografie (pixabay)

The Indian government has cracked whip on rising prices of onions in the country going for a faster track imports and a tender has been floated for 10,000 MT of Onions which will be opened on 27th August, 2015. Currently, onion price is at Rs.70 to 80 per kg in most parts of the country, while the government is focusing merely on controlling Delhi market.

To increase the availability of Onions in domestic market, it the Minimum Export Price of Onions has been increased further to US$ 700 per metric ton, from US$ 425 per MT announced in June. Earlier, it was only $ 205 per MT.

Besides reviewing the prices of onions regularly, the Secretary (Consumer Affairs) on 24th August, 2015 met with SFAC, NAFED, MMTC, Department of Commerce, Ministry of Agriculture and Govt. of Delhi to review the action taken to keep the prices of onions in check, said the government.

To intervene in the market, Small Farmers Agribusiness Consortium (SFAC) and NAFED have procured 5857 MT of onions funded out of Price Stabilisation Fund meant to keep prices of essential commodities under control. SFAC has also procured 2511 MT of Onions for the Delhi Govt., making a total stock of 8368 MT of Onions.

In turn, SFAC is supplying Onions at Rs.30.50 per kg. to SAFAL, which is retailing at Rs.39 per kg. in Delhi. SFAC is also selling Onions to consumers at Rs.35 per kg. through 120 milk booths of DMS. A decision was also taken by Govt. of Delhi to sell Onions at subsidized rate of Rs.40 per kg. through 280 Fair Price Shops, which was further reduced to Rs.30 per kg. w.e.f. 12.8.2015

Prices of Onions have been rising on account of a decline in total production from 189.23 lakh tonnes in 2014-15 as against 194.02 lakh tonnes in 2013-14, a decrease of 4.79 lakh tonnes. The shortage has been attributed to adverse weather conditions including unseasonal rains in Maharashtra and Karnataka regions.

In a National Consultation Meeting held recently, it has been decided to keep prices of essential commodities, especially Onions under control. It also recommended effective action against hoarding and blackmarketing to control prices of food items. Chief Secretaries of States / UTs are also being reminded regularly to keep a watch on price rise and take effective action, said the government.

Union Government made an amendment of EC Act, 1955 on 1st July, 2015 to enable State Govt./UTs to impose stock limits on Onions for a further period of one year till 2nd July, 2016, said a statement.

It may be noted that the rising onion price led to the defeat of Delhi Congress government in the recent past and it has become a sensitive issue in any elections.

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