As onions continue to remain costly at about Rs 80 per kg, the Competition Commission of India is looking into the possibility of cartelisation and hoarding by traders and other entities.

While CCI is yet to start a formal probe into the matter, it is monitoring the price movements as an earlier study commissioned by it had suggested that some cartels could be at play in the onion market and hoarding was done to keep the prices high.

Prices of onions, a staple ingredient for Indians, have skyrocketed in recent weeks to near Rs 80 per kg across the country, forcing the Government to curb its exports and to import the commodity to meet the shortfall.

According to sources, while CCI suspects there could be some cartels at play, it is yet to come across any prima-facie evidence of cartelisation.

“If the commission comes across something substantial, the Director-General (CCI’s investigation wing) would be asked to carry out the investigations,” a source said.

Onions have historically been a politically sensitive commodity and the steep jump in prices has come when elections are scheduled in some states in a few months.

The watchdog had earlier looked into the onion market to ascertain if there were any anti-competitive practices, but did not find any concrete evidence.

Availability of proper and reliable data is vital for the regulator to ascertain if there are violations of competition norms, the sources said, adding that CCI is looking at the data from various quarters, including those publicly available from the Government.

Last year, a study instituted by CCI found that there were clear imperfections, including cartelisation and hoarding, which impacted the prices of onions. The study was conducted by the Bangalore-based Institute for Social and Economic Change.

“Results of seasonal indices, correlations, daily, monthly arrivals, their prices, etc, indicated existence of anti-competitive elements in the onion markets.

“A few big traders having well-connected networks with market intermediaries in other markets seem to play a major role in hoarding for expected high prices,” the study found.

CCI is also looking at the entire agriculture market as part of efforts to check any unfair trade practices. In this regard, it has held deliberations with the Commission for Agricultural Costs and Prices Chairman Ashok Gulati for a better understanding of the market.

Besides onions, the prices of many other vegetables have increased in the recent past amid good rainfall.

Related Topics
comment COMMENT NOW