The Centre has directed all state governments including Maharashtra to take action against traders and speculators keeping onion prices artificially high by taking advantage of the seasonal shortage.
Onion prices both in wholesale and retail markets in most parts of the country have seen a sharp increase since July. In the national Capital, retail prices of onion are ruling as high as 80 per kg on short supply from key growing states.
"All states and Union Territories have been asked to take action against traders/speculators creating artificial price increase of onion taking advantage of seasonal shortage," a senior consumer affairs ministry official told PTI.
Maharashtra, where maximum onion is stored for use in lean season, has been asked to ensure steady supply of the staple vegetable in the consuming markets, the official said.
The state government has been directed to intimate the Centre if there is any blockage in supply chain as that can cause price rise, the official added.
Onion prices are under pressure even in the current month as 90% of stored onions of last year's crop are exhausted and there is only 3-4 lakh tonnes available for consumption, the Ministry said in the status report on onion.
Around 27.5 lakh tonnes of onion were stored in the country for consumption in 2013. Of this, 15.50 lakh tonnes were kept in godowns in Maharashtra, 1-2 lakh tonnes each in Gujarat, Bihar, Karnataka, Madhya Pradesh, Uttar Pradesh, Rajasthan and Tamil Nadu, it said.
Normally, stored onions are consumed during lead period of June-August. The prices continue to rule high as supply of fresh crops from Karnataka and Andhra Pradesh has not been in full swing yet due to delayed harvesting in the wake of rains.
"The onion price situation depends on production and market arrivals. Prices tend to peak during September-November and fall during January-March every year. Generally, onion storage gets depleted by August-September," the report said.
The harvesting of early kharif crop in Andhra Pradesh, Karnataka and Tamil Nadu is continuing. Arrival of fresh crop from these states are expected to increase further in the coming days, it added.
The government has taken several measures to check prices of onion and improve its domestic supplies. These include allowing their imports and restricting exports.