Cheers, Not Tears: Centre to release onions in the retail market in 100+ cities to cool prices

Retail onion prices in the national capital remained elevated, at Rs 77 per kg, data compiled by the Department of Consumer Affairs showed on November 2

In yet another attempt to arrest the rise in the price of onions, the centre has decided to release onions from its buffer stocks in retail markets across 100-plus cities from November 3, a senior official said on condition of anonymity.

The decision was taken on Thursday evening after a meeting was conducted to assess which areas are showing the highest price rise.

"We have conducted a thorough study of the increasing price trend. We are not working with a specific price band, but seeing how prices have risen in a city," the official said.

The centre will be releasing one lakh tonnes of onions from its buffer stock in retail markets through the month of November to keep a lid on the price of this kitchen essential during the festive season.

"While we are intervening in both retail and wholesale markets, we realised that the infusion of our stocks in retail markets was working better for us," the official said.

Per the official, government intervention has caused prices to go down in several cities, including Indore, Bhopal, Raipur, Ranchi, Jaipur, Kota, Lucknow, and Varanasi.

The government had taken similar steps earlier in the year when tomato prices had shot as high as Rs 250 a kg in July.

The intervention has also brought down mandi prices of the commodity, with the vegetable selling for Rs 30-35 per kg on November 2 at Azadpur, in Delhi — Asia’s largest fruit and vegetable market — down from Rs 60-65 per kg last week.

Onion prices have also dropped subsequent to the government imposing a minimum export price (MEP) of $800 / tonne on October 28, boosting domestic supplies. Fresh arrivals of the kharif crop from Rajasthan also helped.

However, retail onion prices in the national capital remained elevated, at Rs 77 per kg, data compiled by the Department of Consumer Affairs showed on November 2. The prices had hovered around Rs 40 per kg a fortnight ago. The average price of onion across the country stood at Rs 58 per kg, while the maximum rate was Rs 85 per kg; the modal price was Rs 60 per kg, and the minimum rate of the vegetable was Rs 18 per kg.

Prices of the commodity are expected to remain high through the festival season. However, the government is adamant about not letting it touch Rs 100. The central government had earlier decided it would maintain a buffer of three lakh tonnes of onions in 2023-24, but increased it to five lakh tonnes after prices rose in August.

It announced a further strengthening of the stock, building up the buffer to seven lakh tonnes, with the aim of keeping onion prices under control. In 2022-23, the government had maintained 2.51 lakh tonnes of onion as buffer stock.

The “decision to impose an MEP of $800 / tonne with effect from 29th October 2023 till 31st December 2023 to discourage exports and maintain availability in domestic markets has shown an immediate price correction in Maharashtra markets,” the centre said in an official statement.

Onions continue to face an export duty of 40 percent, imposed by the centre on August 20 to arrest the price rise.