The Central government decided to impose a stock holding limit on retail and wholesale onion traders till December 31, to contain prices. The move is to improve the domestic availability of onion and provide relief to consumers.
The retail traders can stock onion up to 2 tonnes, while wholesale traders are allowed to keep up to 25 tonnes, Consumer Affairs Secretary Leena Nandan said in a press conference. In the last few weeks, onion prices have shot up sharply to over Rs 75 per kg in the wake of damage to standing Kharif crop due to heavy rainfall.
According to the government, massive exports of 15 lakh tonnes of onion are one of the reasons for the short supply of the commodity. The supply in the domestic market reduced from the month of September itself, leading to artificial price escalation.
Onions are also being disposed of through Open Market Sales. This will be stepped up further to bring down the price rise.
Apart from facilitating the import by the private traders, it has also been decided that MMTC would start importing red onions to meet the demand-supply gap. Requisite action under the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980 would be taken to prevent any hoarding, black marketing of Onions by unscrupulous elements.
The Essential Commodities (Amendment) Act, 2020 provides for the circumstances for imposition of the Stock limit under extraordinary price rise. The All India average retail price variation of onions as of October 21, 2020, when compared to last year is 22.12 % (from Rs 45.33 to Rs 55.60 per/Kg) and when compared to last 5 years average is 114.96 % (from Rs 25.87 to 55.60 per/ Kg), according to an official statement.
Therefore, the prices have increased by more than 100% when compared with an average of the last 5 years and thus the price triggers under EC Act have been reached. Thus the stock limit on the onions has been imposed with effect from today which is 25MT for Whole Sellers and 2MTfor Retailers for a period up to December 31, 2020, it said.
In order to moderate the price rise, the government took a pre-emptive step by announcing a ban on onion export on September 14, so as to ensure availability to domestic consumers at reasonable rates, before the expected arrival of Kharif onion.
“Thus the retail price rise was moderated to some extent, but recent reports of heavy rainfall in the onion growing districts of Maharashtra, Karnataka, Andhra Pradesh, and Madhya Pradesh have created concerns about damage to Kharif crop,” it said.
These developments on the weather front have contributed to the sharp increase in onion prices. To tide over the present situation, the government has stepped up disposal of Onionsthrough the built-up onion buffer stock from the Rabi onion -2020 of I LMT which was doubled since the quantity of last year.
The release of onion from the buffer stock is being carried out swiftly but in a calibrated manner from the second half of September 2020 to major Mandis as well as to retail suppliers such as Safal, KendryaBhandar, NCCF, TANHODA & TANFED (Govt. of Tamil Nadu), and NAFED outlets in major cities and also through State Governments. Presently Govt. of Assam, and Govt. of Kerala (Horticulture Product Dev. Corp. Ltd) are being supplied from the retail disposal mechanism. Andhra Pradesh, Telangana, and Lakshadweep have also placed their requisition for onions, which are being dispatched.