Agri Business

As onion prices sizzle, Centre clamps stock limits

Our Bureau New Delhi | Updated on October 23, 2020 Published on October 23, 2020

Retailers allowed to store 2 tonnes; wholesalers can hold 25 tonnes

Barely a month after President Ram Nath Kovind gave his assent to amend the Essential Commodities Act to stop the stocking of certain food produce, the Centre on Friday used the same piece of legislation to impose stock limits on onion, whose prices have started climbing in markets across the country.

Leena Nandan, Secretary, Department of Consumer Affairs, said the government took the decision to impose stock limits of 25 tonnes on wholesalers and 2 tonnes on retailers till December 31 as market prices of the bulb breached the trigger for invoking the clause of ‘extraordinary circumstances’.

Price trigger

The amended Act allows the government to set stock limits if the retail price of a horticultural produce is 100 per cent higher than in the prevailing 12 months or exceeds the average retail price of the last five year, whichever is lower.

At ₹55.60/kg, the all-India average onion price was more than 100 per cent the average price over the last five years, she said.

Nandan, who addressed a press meet along with Food Secretary Sudhanshu Pandey, said the government has been watching the situation since early September and taking a series of steps to augment stocks. The September 14 decision to ban onion exports was part of this.


Buffer stock

Nandan said that for the first time the government has created a buffer stock of about 1 lakh tonnes of onion from the previous rabi season and has been focussing on calibrated and timely release of these stocks to States. Kerala and Assam were the first to indent, followed by Tamil Nadu, Andhra Pradesh and Telangana. So far, 35,000 tonnes of onion have been released to these States from the buffer stock maintained by NAFED.

NAFED Managing Director SK Chadha, who joined the meeting remotely, said they were forced to sell 42,000 tonnes of onion in the open market as the bulb has a shelf life of only three-and-a-half months. Currently, NAFED is holding 20,000-25,000 tonnes, he said.

Nandan said that, at 261 lakh tonnes, onion production in 2019-20 was very good and, in fact, India exported 15 lakh tonnes till August, which was equivalent to the total onion export the previous year.

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Published on October 23, 2020
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