The Centre issued an advisory to state governments on October 29, asking them to allow onion traders and wholesalers a three-day window from the date of purchase before imposing the stock limit.
The Consumer Affairs Ministry said states might grant the three-day period to allow traders and wholesalers time to package and grade the produce.
“The grace of three days will give them some time for disposing the produce before stock limit sets in,” a senior consumer affairs ministry official told The Economic Times.
Onion traders, on their part, said the move would not benefit them and demanded at least 15 days to meet the Centre’s limit.
“It’s not easy to dispose these stock immediately. We need time. But government is giving three days for new stock without any relief related to stock we already hold (sic),” Rajinder Sharma, president of the Azadpur Mandi Association told the paper.
The Centre on October 23 imposed a stock holding limit on retail and wholesale traders till December 31 to improve the domestic availability of the commodity and provide relief to consumers.
Retailers can stock onion only up to 2 tonne, whereas wholesale traders are allowed to keep up to 25 tonne, Consumer Affairs Secretary Leena Nandan said.
Nandan said the government had to invoke the Essential Commodities (Amendment) law -- which was passed in September in Parliament -- that allows it to regulate perishable commodities in the extraordinary price rise situation.
On October 29, the government also banned exports of onion seeds with immediate effect amidst rising prices of the bulb in the domestic markets. Earlier, the export of onion seeds was in the restricted category, which means an exporter was required to obtain a licence or permission from the government for shipments.
"The export of onion seeds is prohibited, with immediate effect," the Directorate General of Foreign Trade (DGFT) said in a notification. It added that the provisions under transitional arrangement shall not be applicable.
Onion seed exports were worth $0.57 million during April-August this fiscal against $3.5 million in the full 2019-20 fiscal. The DGFT has already banned exports of onion to contain onion prices.
Besides these measures, the official outlined the Centre’s plans to moderate onion prices: “The imposition of stock limit will immediately increase arrivals in mandis. We have also released onions from buffer stock selling them at Rs 26/kg and intend to release about 70,000 tonnes by November first week. Cheaper imports will further help cool down the prices.”