Stabilizing Onion Prices

Earlier, daal, roti and pyaaz (onions) were considered to be the food of the poor. But in modern times, onion has become a commodity far from the reach of the poor.

In the last one year, the selling prices of onion have shown a rise of 40 percent in metro cities. The worst hit metro city by this price rise is none other than our very own ‘DILLI’. According to the consumer affairs ministry, prices were Rs.24/kg in the previous year. This year, there was an increase in its price to Rs.34/kg.Witnessing such a spike in onion prices, the govt. decided to come out with a way to stabilize its prices.

Now, the govt., in order to increase the domestic availability of the commodity and to prevent further increase in its price, is considering importing onions. In the second last week of June, the govt. increased the minimum export price of onion from 250 dollars a tonne to 425 dollars a tonne. This was done in order to restrict exports so that the domestic availability of the commodity increases. In some of the major growing states, the crop has been damaged in storage. This has resulted in sluggish supply of good quality onions which has further lead to another problem. Now, the prices in both wholesale as well as retail markets have started rising due to this.

This year, there were unseasonal rains in Maharashtra and Gujarat in early March due to which the Rabi onion crop got damaged. So now most of the onion in storage is of poor quality and therefore unable to meet the demand in lean season. Because of high storage losses, market availability of onions will reduce, prices will go up till mid-Sept, when new Kharif crop arrives.

To control the prices, the govt. has decided to import onions and also ease the fumigation norms for smooth shipment of onions. Also, the country’s production has declined from 19 million in previous year to 18 million in this year. All this has alerted the govt. to take timely measures.

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