Govt releases buffer stock to curb onion prices

07:07 AM Oct 18, 2021 | Sanjay Jog

The heavy rains during monsoon withdrawal and waterlogging in farms have severely damaged the new onion crop in Nashik, Pune, Ahmednagar, and a couple of other districts, further impacting the arrival of onions resulting in a sudden price hike.

The same situation has been seen in Karnataka too, where the onion arrival has affected and damaged the quality, which has affected the demand and supply in the state. Even though the onion arrival has slowly begun after the withdrawal of the monsoon, the farmers and traders indicate that the price volatility will prevail until the arrival of the new crop, which is expected by the end of November instead of October.


The onion is auctioned in Nashik and other districts ranging between Rs 2,500 per quintal and Rs 3,500 per quintal, depending on the quality. However, in the retail market, onion is sold at Rs 50 to 60 per kg. The prices may increase further if the arrival is not picked up in the market. The situation is grim in other states too, where the returning monsoon rains have wreaked havoc in Andhra Pradesh, Tamil Nadu, Madhya Pradesh and Gujarat.


“Torrential rains and waterlogging in the fields have damaged the onion crop. However, the arrival of onions started after water receded from the farmers. After the new crop arrives by the end of November, the prices will be eased. If the unseasonal rains are reported, then it may again create onion shortage in December,” said leading onion trader from Nashik district Nitin Jain told Free Press Journal.

A senior member of the Nashik’s Lasalgaon Agriculture Produce Market Committee admitted that fresh onion is unavailable. Still, Maharashtra’s old onion is in the highest demand across the country. “New onion crop has been damaged due to torrential rains in Nashik. Due to high demand and low supply, the prices will be on the rise,” he noted.

Meanwhile, the Department of Consumer Affairs has taken up calibrated, and targeted release of onions from the buffer on First-in-First-Out (FIFO) principle commenced from last week of August 2021 guided by the twin objectives of moderating prices ensuring minimal storage loss.

As a result, the retail price of onion in Delhi is viz Rs 44 kg as of October 14. Similarly, in Mumbai, Kolkata and Chennai are Rs 45 kg, Rs 57 kg and Rs 42 kg, respectively. The All India retail price of onion till October 14 is Rs 37.06 per kg, while the All India wholesale price of Onion is Rs 3002.25 per quintal.

The releases are targeted towards States/UTs where prices ruled above the all-India average and rising over the previous month. Till October 12, a total of 67,357 MT has been released in major markets such as Delhi, Kolkata, Lucknow, Patna, Ranchi, Guwahati, Bhubaneshwar, Hyderabad, Bangalore, Chennai, Mumbai, Chandigarh, Kochi and Raipur.

In addition, Grade-B onions (below the Fair Average Quality - FAQ) are disposed of in local markets in Maharashtra, Madhya Pradesh and Gujarat.

The Department of Consumer Affairs has maintained an onion buffer under the Price Stabilisation Fund (PSF) to achieve market intervention to moderate prices. In 2021-22, against the target of building 2 LMT Onion buffer, a total of 2.08 LMT was procured from the Rabi-2021 crop from April to July 2021.

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