Govt bans export of onions as their prices remain high
NEW DELHI: The Union government on Sunday brought in stronger measures to tackle the rising prices of onions by banning exports of all varieties of the commodity and imposing stockholding limits, a move that makes it illegal for traders to store the item beyond federally fixed quantities.
Onion prices have more than doubled from their usual rates in many cities since August. They are selling between ₹60 and ₹80 per kg in retail markets, while wholesale rates are between ₹40 and ₹50. During times of normal availability, the consumer prices usually range between ₹20 and ₹30 per kg.
“In the view of sustained high price of onions in the market, [the] central government today took several steps to contain its prices, namely, imposition of stock limits on traders, ban on exports and has asked state governments to take strict measures to prevent hoarding by traders, including organising raids,” an official note said.
Retail traders can stock no more than 100 quintals and wholesalers can stock only 500 quintals in all states, according to the central government’s order.
Stopping exports and limiting the amount traders can store are steps aimed at improving supplies. However, heavy unseasonal rain in many states continues to disrupt onion shipments. Maharashtra, Madhya Pradesh, Uttar Pradesh, Karnataka and Bihar, among others, have witnessed heavy rainfall activity through the week.
Sowing of the country’s main summer onion crop was delayed by over a month in key states due to a sluggish start to this year’s monsoon, which has pushed back harvests in what is a lean season, another reason for the spike in prices.
This crop is usually sown in April-June and harvested during September-November, a time when supplies from the previous harvest are usually exhausted. Since onions are a common ingredient in most Indian dishes, consumers are very sensitive to rise in prices.
Traders, who rely on onions they set aside for such seasonal shortages, often gouge prices, leading to inflationary spells.