Within a week, the mandi prices of onion at Lasalgaon, Nasik district of Maharashtra, the hub of the trade, has increased by 15% to Rs 2351/quintal on Friday on account of purchase by agencies like Nafed and National Cooperative Consumers’ Federation of India (NCCF) to boost buffer stock.
Average mandi prices were Rs 1700/quintal a month back.
Food and consumer affairs minister Piyush Goyal had, last month, promised to procure 0.2 million tonne (MT) of onion from farmers at a highest ever rate of Rs 2410/quintal, as it sought to help farmers hit by the prohibitive 40% export tax on the vegetable.
Nafed and NCCF, which have commenced procurement of onion from farmers in Maharashtra and Madhya Pradesh so far, have purchased 19,000 tonne of kitchen bulb and they will continue to buy the vegetable till kharif crops start arriving in the market by October 1.
Nafed and NCCF had earlier purchased 0.3 MT onion at an average price of Rs 1700/quintal for buffer stock.
“We are also liquidating our buffer stocks of onion in the market to boost supplies and selling at a subsidised rate of Rs 25/kg at several outlets across states,” Anice Joseph Chandra, managing director, NCCF, told FE.
Chandra said the government is aiming to provide adequate compensation to farmers through higher purchase prices, while keeping consumer interest in consideration through selling the key vegetable at subsidised prices in the market.
According to the department, the modal retail prices of onion rose from Rs 20/kg since the beginning of last month to Rs 32/kg on Friday. Rating agency Crisil in a recent report said that retail onion prices are expected to hit Rs 60-70/kg this month.
Retail prices of onion started to rise for the first time in the middle of last month, after nearly two years, due to reports of sluggish kharif sowing on delayed arrival of monsoon in the key producing states of Maharashtra and Karnataka.
High moisture content in the stored rabi crops, because of unseasonal rains in Maharashtra and Karnataka in April, has reduced the shelf-life of the staple, causing fears of supply constraints by September.
Inflation in onion, which had been in the negative zone since September, 2021, rose to 11.72% in July.
NCCF and Nafed are currently selling onion from the buffer stock of 0.3 MT at a highly-subsidised rate of Rs 25/kg to consumers in various areas.
The estimated production of onion during the 2022-23 crop year (July-June) declined marginally 31.01 MT against 31.7 MT reported in the previous year. The output was 26.64 MT in 2020-21.
India is the biggest producer of onion and Maharashtra, Madhya Pradesh, Karnataka and Gujarat have more than 70% share in the country’s production.
Rabi onion harvested during April – June accounts for around 65% of the country’s onion production and meets the consumer’s demand till the kharif crop is harvested from October-November.
Kharif harvested onions are not stored because of higher moisture content thus entering the market directly.
Source:financialexpress.com