Commodity Onion

To check increase in onion prices govt begun dumping buffer stock to states

To check increase in onion prices govt begun dumping buffer stock to states

To prevent a significant increase in retail onion prices, the Centre said on Friday that it has begun dumping buffer stock in a calibrated and targeted manner to states where prices have increased in recent months.

The buffer stock is being released even in the Lasalgaon and Pimpalgaon wholesale onion mandis in Maharashtra to supplement supplies in these markets, according to a statement from the Consumer Affairs Ministry.

Onion prices in the commodity’s hub, have risen by ₹750 per quintal

As per the government, the states were provided onion at ₹ 21/kg ex-storage sites. It was also said that Mother Dairy’s Safal outlets had been provided at ₹ 26/kg including shipping costs. ‘vigorous onion releases from the buffer contribute to price stability,’ the government stated.

According to the ministry’s data, retail onion prices have been gradually rising in recent weeks. On February 18, onion prices were ₹ 37/kg in Delhi and Chennai,₹ 39/kg in Mumbai, and ₹ 43/kg in Kolkata.

The ministry further stated that late Kharif (summer) onion imports have been consistent and are projected to continue till Rabi (winter) arrivals begin in March 2022. According to the report, the all-India average onion price was 22.36% lower than the previous year as of February 17.

According to the government, onion prices were relatively steady in 2021-22 as a result of efficient market intervention via the Price Stabilisation Fund (PSF). Similarly, the average retail price of potatoes in India was 6.96% cheaper on February 17th, at ₹ 20.58/kg, compared to the previous month.

‘Potato seeding has been delayed in the southern region of West Bengal due to cyclone Jawad,’ the ministry stated. ‘However, the State reported that crop area has recovered practically to last year’s level.’ The total crop area for 2021-22 is expected to be comparable to last year, according to the report.

The PSF plan provides interest-free financing to states in exchange for the establishment of a State-level Price Stabilisation Fund on a 50:50 share basis (75:25 in the case of NE States).

So far, six states have taken the advance, namely Andhra Pradesh, Assam, Odisha, Tamil Nadu, Telangana, and West Bengal, with a total of ₹ 164.15 crore issued as Central share.

These states have the resources and authority to intervene in order to keep the prices of vital food items under control. ‘Other states have also been urged to establish the PSF for state-level measures to curb price rises in vital food goods,’ the statement continued.

A series of IT raids on Onion traders resulted in bulk prices dropping

In the case of tomatoes, prices have fallen in the last month but have stayed somewhat higher than the previous year’s level. The all-India average price of tomato as of February 1 was ₹ 26.69/kg, which was lower than the previous month.

Prices may fall further in the following week as arrivals in north India ramp up. Arrivals in South India will also increase in the following week, with the pace picking up until the end of February, according to the report.