The government has purchased about 71,000 tonnes of onions for buffer stock, out of a total objective of acquiring 5 lakh tonnes for price stability, according to a report by PTI. It also anticipates retail prices to reduce as the monsoon progresses over most parts of the country.
The Department of Consumer Affairs reported that on June 21, the modal price for onions was Rs 40 per kg, while the average retail price throughout India was Rs 38.67 per kg.
A senior official told PTI, that as of June 20, the Centre has acquired 70,987 tonnes of onions, compared to 74,071 tonnes during the same period the previous year.
"The pace of onion procurement for price stabilisation buffer this year is largely comparable with last year, despite about 20 per cent decline in estimated rabi production," the official said, adding that the government is on track to achieve targeted procurement of 5 lakh tonnes for price stabilisation.
According to the official, the government would use its power to retain or release onions from the buffer to keep their pricing stable.
The price paid for procurement is dynamic and dependent on market rates.
The recent price hikes have been attributed to the shortage in output for the 2023–24 season, namely in the crops of Kharif, late Kharif, and Rabi, as a result of insufficient rainfall in important producing regions, said the official.
The government has put in place many policies, such as export tariffs and limitations, to control price volatility. August of last year saw the implementation of a 40 percent export tariff. October saw the implementation of a Minimum Export Price (MEP) of $800 per tonne, and December 8 saw the implementation of a total export ban. Beginning on May 4, 2024, these restrictions were progressively loosened per increased stability in significant onion markets, such as Lasalgaon in Maharashtra.
Also read: Long-term reforms a must to set right onion economy
The extended and severe hot conditions that are harming agricultural production nationwide are the cause of the recent surge in vegetable prices, which includes onions, tomatoes, and potatoes. But there's hope for better crop yields in the approaching Kharif season since the monsoon is predicted to relieve these circumstances.
Bad weather has caused major production decreases in major producing states including Rajasthan, Maharashtra, Karnataka, and Andhra Pradesh.
The government intends to strategically release onions from its buffer supply as needed to preserve price stability in the future. This strategy seeks to maintain equilibrium between market forces and protects customers against unwarranted swings in the price of necessities.
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