Onion prices: To rein in price, 50% more onions may be procured

For the current fiscal, the government had doubled the stock size to 100,000 tonnes but could not control prices, which touched more than 100 a kg during October, when there was a shortage of bulbs. Now it plans to create a buffer stock of 150,000 tonnes. “Onion harvest hits markets twice, once in April and then in November. There is generally short supply of onions in the markets from August to November, when prices spike. There is a need for more buffer quantity to contain price hike,” said a senior food ministry official, who did not wish to be identified.

He said the government will start procuring onions through Nafed from April. “The shelf life of winter onions is more than the summer crop, which is harvested in November. So, we buy during April-July. Onions can be stored for 6-7 months. After that, onions get damaged due to loss of moisture,” he said.

In 2020-21, about 40% onions were damaged out of the buffer stock of 100,000 tonnes. The government had bought onions at an average price of 10-11 a kg.

“We will take all precautions to reduce the damages, and a bigger stock may help contain prices during the festive season,” said the official.

According to the consumer affairs ministry, which tracks prices of food commodities, the price behaviour of onion has nothing to do with production. “Over the past 10 years, onion production has steadily gone up from 15.1 million tonnes in 2010-11 to 26.1 million tonnes in 2019-20. The annual domestic consumption is around 16.5 million tonnes. So supply constraint is not the reason for the price hike,” said a consumer affairs ministry official, who did not wish to be identified.

Last year, the government had banned exports, imposed stock limits and placed import orders to ease onion prices.

“This year, we want to approach in a more planned way so that no one suffers. Consumers continue to get the kitchen staple at a reasonable price throughout the year while farmers and exporters too receive better remuneration through uninterrupted exports,” said the official.