The retail price of onion touched ₹50/kg in New Delhi on Tuesday with lower supplies and consumers are likely to be affected for the next two months before the Kharif crop arrivals hit the market around early-October.

Average retail price of the bulb stood at ₹45/kg, according to Consumer Affairs Ministry data, up from ₹36 three weeks ago and ₹29 three months before. Retail prices have jumped over 45 per cent from a year ago when it stood at ₹31/kg.

Onions were selling at ₹45-46/kg in Safal stores and sellers warned that prices could hit ₹70.

Stock shifting The sustained rise in onion prices has prompted Government agencies like Small Farmers’ Agribusiness Consortium (SFAC) and National Agricultural Cooperative Marketing Federation of India (Nafed) to swing into action.

While the Centre has said that it is in the process of importing 10,000 tonnes of onions through Nafed and directed States to crack down on hoarders to ensure adequate supply, the SFAC is augmented onion availability in the Delhi markets by shifting its stock from Nashik.

“We have gradually started bringing the stocks we have in Nashik to Delhi gradually. Safal is picking up all its stock from us and we are also retailing directly to consumers at ₹35/kg through the 150-odd Delhi Milk Scheme kiosks,” said Pravesh Sharma, Managing Director, SFAC.

The agency had procured 10,000 tonnes of the vegetable under the price stabilisation fund announced by Finance Minister Arun Jaitley in the last Budget. It has already brought 600 tonnes into the Delhi market and is averaging about 100-150 tonnes each day.

“The Delhi government had asked us to procure 2,500 tonnes which is already stocked. A decision will be taken in a day or two over direct sales to consumers,” said Sharma.

Citing a supply-demand mismatch, he said that the Government had to tide over the next two months through which stocked onions are to be continuously released into the market.

Supply-demand gap

The idea was to keep all channels flushed with stocks to prevent speculation and if necessary, the SFAC and Nafed could step into the market to procure more.

“The high prices could last between 6 and 8 weeks. Right now, it’s the stored onion that is being released and the Kharif crop will start coming to the market by early-October. So it’s these two months that we have to tide over and we have sufficient stocks to ensure that prices don’t go through the roof,” Sharma told BusinessLine .

Union Food Minister Ram Vilas Paswan had earlier said that the bids for the tender floated by Nafed for imports would be finalised this week. The price rise is attributed to widespread damage to the Rabi crop caused by unseasonal rains between February and April. Total production is estimated at 189 lakh tonnes (lt) in 2014-15, lower than 194 lt recorded the previous year.

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