Govt to boost onion sales of retail markets to rein in prices during festive season

Buffer stock of onions is maintained to meet any exigencies and for price stabilisation

The government will boost up sales of onion in retail markets to rein in prices of the essential commodity during the upcoming festive season, a senior official of the Consumer Affairs department said on October 26.

The central government had earlier decided it will maintain 3 lakh tonne of onions in the 2023-24 season as buffer stock but increased it to 5 lakh tonnes after prices rose in August.

The stocks are now to strengthen further, with the government deciding to build up their buffer to 7 lakh tonnes as it aims to keep onion prices under control. In 2022-23, the government maintained 2.51 lakh tonne onion as buffer stock.

Also read: Onion prices in wholesale markets of Maharashtra increase 30% within a week

As per information accessed from the consumer affairs department, the government has already released 1.74 lakh mt of its total stock. "We are releasing stocks in 16 states, mostly in wholesale markets to cool down prices," the official further said.

The government will begin releasing stocks in retail markets as Diwali nears, to cool down any price spikes that may happen due to festive demand.

"The buffer is being built to keep prices under the Rs 50 per kg bracket even during the festive season," the official added.

Shop-end price of onion was recorded at an average Rs 40 a kg on October 26, up from Rs 33 a week back. A delay in the arrival of the kharif red onion crop has led to a shortage because of delayed and erratic rainfall in Maharashtra and Karnataka.

The government expect prices to cool down substantially once kharif crop begins coming in.

As per government data, there is a huge supply demand gap, due to which the prices are rising.

"Once kharif arrivals begin, the prices would cool, but festivities will keep them elevated. We anticipate a steep price fall by November end," the official cited above added.

Retail prices of the commodity were higher than Rs 50 per kg at 43 of the total 545 centres across the country. Of these, the North-Eastern states of Nagaland and Mizoram showed highest price trends.

Onion prices had begun to climb in Maharashtra’s Pimpalgaon and Lasalgaon wholesale markets, Asia’s largest, in the second week of August. The price jumped to Rs 2,500 a quintal on August 9 from Rs 1,900 a quintal on August 7 and Rs 1,200 per quintal on August 5.

The government then imposed a 40 percent export duty on the commodity on August 20 which stabilized prices to an extent.

Also Read: Centre keeping a tab on rising onion prices but unlikely to intervene