Agri Business

Onion prices drop after IT raid on Nashik traders

Radheshyam Jadhav Pune | Updated on October 26, 2021

Rates drop by ₹200 a quintal, further fall likely as sellers begin to offload stocks

A series of income tax (IT) raids on onion traders in Maharashtra’s Nashik district has resulted in the prices of the bulk dropping by about ₹1,000 a quintal over the past two weeks in the agricultural produce marketing committee (APMC) yards in the region.

In particuar, prices have slipped by at least ₹200 a quintal in the last four trading sessions.

Impact on prices

The raids have stirred onion markets in Maharashtra, which contributes 33 per cent of the country’s onion production and houses Asia’s biggest onion market in Lasalgaon. Onion prices that had ruled around ₹3,850 a quintal have now declined to ₹2,900 in Pimpalgaon APMC yard.

On October 18, the modal price (rates at which most of the trades take place) for onion in Lasalgaon was ₹3,100 per quintal and ₹3,125 per quintal in Pimpalgaon (Basawant). But after raids began on October 21, prices dropped the next day to ₹2,850 in Lasalgaon and ₹3,001 in Pimpalgaon. On Monday (October 25), the modal price of golti onion in Pimpalgaon nosdeived to ₹2,100 per quintal, while other onions remained stable at a modal price of ₹2,900 per quintal

The IT Departmetn launched raids on some 10 onion traders at Pimpalgaon (Basawant) in Nashik district on October 21. Sources saidsearch operations still continue.

In a press release on Monday evening, the IT Department said it had launched search and seizure operations in the premises of a person engaged in real estate business, primarily operating as a land aggregator in Nashik.

“So far, unaccounted cash of ₹23.45 crore has been seized,” it said, adding that unaccounted income of more than ₹100 crore had been detected.

The onion traders’ association did not issue any official statement. Nandkumar Daga, President of Lasalgaon Onion Traders’ Association, said, “We don’t want to comment on this”. Other onion traders in Nashik preferred to keep mum.

More on cards?

Lasalgaon APMC officials admit that IT raids have helped to stabilise onion prices in the market. Since the search operations began onion prices have dipped and there could be further decline as traders are offloading the stock.

“Alongside natural calamities, there are a lot of players involved in the onion market who determine rise and fall of prices. Firstly, onion farmers are getting organised and have started controlling supply. Traders hoarding onion try to reap the benefits of shortage. There is a group of onion traders which controlled the market for years. Hoarding remains a major problem and IT department action is targeted at traders so that they release the stock immediately.” said a market analyst in Nashik who requested anonymity.

Government’s action

This is not for the first time the IT Department has raided onion traders. In October last year, wholesale onion price at Lasalgaon touched ₹5,000 per quintal as supply declined. The IT department had carried out a series of raids in Nashik which resulted in a decline in the onion prices. Then, traders threatened to boycott auctions alleging that the government was targeting them.

According to market players, the government wants to ensure stable onion prices during the Diwali festival and there is no backlash from the people.

Published on October 25, 2021

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