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Last updated: 23 Oct, 2020  

Onion.9.Thmb.jpg Government imposes stock limit on onion to moderate prices

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SME Times News Bureau | 23 Oct, 2020
Against the backdrop of the price rise observed since the second week of September, the Central government on Friday imposed a stock limit on onion with immediate effect to moderate its prices and availability in the retail market.

The stock limit will now be 25 metric tons for wholesellers and 2 metric tons for retailers for a period up to December 31.

The step was taken the monitoring of the rise in prices of onion, on a day-to-day basis through a dashboard by the Department of Consumer Affairs, indicated the requirement of immediate steps to cool off the spiralling trend, the Consumer Affairs Ministry said in a statement.

The Essential Commodities (Amendment) Act, 2020 provides for the circumstances or imposition of stock limit under extraordinary price rise.

The all India average retail price variation of onion as on Wednesday when compared to last year was 22.12 per cent (from Rs 45.33 to Rs 55.60 per/kg). The average is 114.96 per cent (from Rs 25.87 to 55.60 per/kg) when compared to last five years.

Therefore, the prices have increased by more than 100 per cent when compared with average of last five years and thus the price triggers under the EC Act have been reached, the Ministry said.

In order to moderate the price rise, the government took a pre-emptive step by announcing a ban on onion export on September 14 so as to ensure availability to domestic consumers at reasonable rates, before the expected arrival of Kharif onion, said the statement.

Thus, the retail price rise was moderated to some extent, but recent reports of heavy rainfall in the onion-growing districts of Maharashtra, Karnataka, Andhra Pradesh and Madhya Pradesh have created concerns about damage to the Kharif crop, it said.

As per the Ministry, these developments on the weather front have contributed to the sharp increase in onion prices.

"To tide over the present situation, the government has stepped up disposal of onions through the built-up onion buffer stock from the Rabi onion-2020 of I LMT which was doubled since the quantity of last year."

The release of onion from the buffer stock is being carried out swiftly but in a calibrated manner from the second half of September this year to major 'mandis' as well as to retail suppliers such as Safal, Kendriya Bhandar, NCCF, TANHODA and TANFED (Tamil Nadu), and NAFED outlets in major cities and also through the state governments.

Presently, Assam and Kerala are being supplied from the retail disposal mechanism, while Andhra Pradesh, Telangana and Lakshadweep have also placed their requisition for onions, and these are being dispatched, said the Ministry.

Further, onions are also being disposed of through Open Market Sales, it said, adding this will be stepped up further to bring down the price rise.

"An estimated Kharif crop of 37 LMT is also likely to start arriving in the Mandis that will add to the availability of onions," it said.

To additionally ensure availability of the staple in the Mandis, the Ministry said, the government has taken steps to facilitate import of onion and on Wednesday, relaxed the conditions for fumigation and additional declaration on Phytosanitary Certificate under the Plant Quarantine Order, 2003, for imports up to December 15.

The Indian missions in the relevant countries are already contacting the traders for ensuring greater imports of onions to the country.

"Such consignments of imported onions, which arrive on Indian ports, through land or sea, without fumigation and endorsement to that effect on the PSC, would be fumigated in India by the importer through an accredited treatment provider.

"After fumigation, these consignments would be released with no additional inspection fee and an undertaking will be obtained from the importers that the onion will be used only for consumption and not for propagation. Such consignments of onions for consumption will not be subjected to four times additional inspection fee on account of noncompliance of conditions of import under the PQ order, 2003," the statement said.

Apart from facilitating the import by private traders, it has also been decided that MMTC would start importing red onions to meet the demand-supply gap.

Requisite action under the Prevention of Blackmarketing and Maintenance of Supplies of Essential Commodities Act, 1980 would be taken to prevent any hoarding, black marketing of onions by unscrupulous elements, the Ministry added.

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