Here’s why onion prices have surged to nearly ₹100/kg

Here’s why onion prices have surged to nearly ₹100/kg
  • Onions that were available for ₹20 per kilogram a few weeks back, have seen a massive surge in prices.
  • In some cities like Delhi and Mumbai, onions are being sold at over ₹100 per kilogram.
  • Massive losses to kharif onion in north Karnataka, government’s stock limits and traders protests are the reasons behind this rise in prices.
Nothing makes Indian households more anxious and worried than buying a staple vegetable at high prices — especially when available at normal prices a few days ago.

The price of onion has been skyrocketing for quite some time now. The kitchen staple was available for ₹20 per kilogram a few weeks back. However, people now have to pay over ₹80 per kilogram. In some cities like Delhi and Mumbai, the prices are much higher at ₹100 for a kilogram of onions.

CitiesOnion prices per kg on October 23
Mumbai ₹93
Kolkata ₹80
Source: TOI

And it is not just Indian households, the issue of rising onion prices is also bothering the COVID-19 hit restaurant industry. Some restaurant owners believe they will have to revise their rates, if onion prices continue to rise for the next three months.

These are the various reasons behind soaring onion prices.

Massive hit to kharif crop

Onion prices have been rising ever since reports about massive losses to kharif onion in north Karnataka broke out in the last week of August. The early-kharif onion crop sown in Andhra Pradesh and Karnataka were damaged due to incessant rains. Heavy rains also massively hit onion crops grown in in parts of Madhya Pradesh, Gujarat, and Maharashtra

India’s average onion consumption stands at 3,000 truckloads every day; however, the massive damage to kharif crop has reduced supply to 1,5000 truck loads in the markets.

That said, the damage to the crop cannot solely result in the rising prices of onion at exponential rates. According to media reports, other reasons include ‘poor storage, and rickety supply chains.’

Indian government’s intervention
Less than a month ago, the Indian government excluded onions from other essential commodities act while passing amendments to the Essential Commodities Act 1955 — which applies no stock limit.

But with rising onion prices, the Indian government had to intervene and impose stock limits on retailers and wholesalers with immediate effect until December 31. Now, retailers can stock onions only up to 2 tonnes, whereas wholesale traders can store up to 25 tonnes. This will check hoarding and black marketing.

"This is a decisive step. We have imposed stock limits on onion traders with an immediate effect till December 31 after concerns that traders were releasing their stored stocks slowly, creating artificial price rise situations."Consumer Affairs Secretary Leena Nandan said.

Traders protest against this
To register their protest against the government's move, onion auctions have been shut for the last two days across the 15 Agriculture Produce Market Committees (mandis) of Nashik, including the Lasalgaon APMC, Asia's biggest onion market.

NCP chief Sharad Pawar has urged the traders to re-open the markets — adding that there was a need for comprehensive policy regarding lifting of the export ban and stock limit on onions.

Dealing with surging onion prices
Meanwhile, state governments have been stepping up to contain the onion prices in the market. Goa Chief Minister Pramod Sawant, on October 28, said each ration holder will be given three kilogram onion at ₹32-22 per kg via the state's public distribution system network.

On the other hand, Kerala’s Chief Minister Punarayi Vijayan wrote to his counterparts in Maharashtra and Tamil Nadu earlier this week to permit procurement of onions directly from farmers and Farmers Producers Organisations (FPO).

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