Onion Price Rise: Govt imposes stock limit from October 23

The price rise observed in Onions since the second week of September required proactive steps to be taken. The rise in prices of onion was being monitored very closely on a day-to-day basis through a Dashboard by the Department of Consumer Affairs and called for immediate steps to cool off the spiralling trend.

The Essential Commodities (Amendment) Act, 2020 provides for the circumstances for imposition of the Stock limit under extraordinary price rise. The All India average retail price variation of onions as on 21 October, when compared to last year, is 22.12 % (from Rs 45.33 to Rs 55.60 per/Kg) and when compared to last 5 years average is 114.96 % (from Rs 25.87 to 55.60 per/ Kg).

Therefore, the prices have increased by more than 100% when compared with an average of the last 5 years and thus the price triggers under EC Act have been reached.

Thus the stock limit on the onions has been imposed with effect from October 23 which is 25 MT for Whole Sellers and 2 MT for Retailers for a period up to December 31, 2020.

In order to moderate the price rise, the government took a pre-emptive step by announcing a ban on onion export on September 14, 2020, so as to ensure availability to domestic consumers at reasonable rates, before the expected arrival of Kharif onion.

Thus the retail price rise was moderated to some extent, but recent reports of heavy rainfall in the onion growing districts of Maharashtra, Karnataka, Andhra Pradesh, and Madhya Pradesh have created concerns about damage to the Kharif crop.

These developments on the weather front have contributed to the sharp increase in onion prices.

The release of onion from the buffer stock is being carried out swiftly but in a calibrated manner from the second half of September 2020 to major Mandis as well as to retail suppliers such as Safal, Kendriya Bhandar, NCCF, TANHODA & TANFED (Govt. of Tamil Nadu), and NAFED outlets in major cities and also through State Governments.

Presently Govt. of Assam, and Govt. of Kerala (Horticulture Product Dev. Corp. Ltd) are being supplied from the retail disposal mechanism. Andhra Pradesh, Telangana, and Lakshadweep have also placed their requisition for onions, which are being dispatched.

Further, Onions are also being disposed off through Open Market Sales. This will be stepped up further to bring down the price rise.

An estimated Kharif Crop of 37 LMT is also likely to start arriving in the Mandis that will add to the availability of Onions.