Govt imposes stock limits on onions to curb spiralling prices

Govt imposes stock limits on onions to curb spiralling prices

New Delhi, October 23, 2020

The Government today imposed stock limits on onions -- 25 MT for wholesalers and 2 MT for retailers -- with effect from today until December 31, 2020 as part of steps to curb spiralling prices.

"The price rise observed in onions since the second week of September required pro-active 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," an official press release said.

The Essential Commodities (Amendment) Act, 2020 provides for the circumstances for imposition of stock limits when there are extraordinary price rises.

The all-India average retail price variation of onions as on 21.10.2020 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 average of 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 today which is 25MT for Wholesalers and 2MT for Retailers for a period up to 31-12-2020," the release said.

Earlier, in order to moderate the price rise and increase availability in the domestic market at reasonable prices, the government had banned onion exports on September 14, 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 Kharif crop," the release said.

"These developments on the weather front have contributed to the sharp increase in onion prices. To tide over the present situation, the government has stepped up disposal of onions through the built-up onion buffer stock from the Rabi onion 2020 of I LMT which was doubled since the quantity of last year. 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, Kendrya 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," it said.

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, the release said.

The government has also taken steps to facilitate the import of onions, the release added.


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