Competition panel to probe hoarding, onion price rigging
With onion prices soaring to Rs 80 per kilo in several places including the national capital, and household budgets feeling the pinch, the Competition Commission of India (CCI) is all set to look into the possibility of cartelisation and hoarding by traders and other entities to see if they have manipulated prices using unfair means.business Updated: Aug 16, 2013 00:19 IST
Your packet of onions may come under regulatory scanner, again.
With onion prices soaring to Rs 80 per kilo in several places including the national capital, and household budgets feeling the pinch, the Competition Commission of India (CCI) is all set to look into the possibility of cartelisation and hoarding by traders and other entities to see if they have manipulated prices using unfair means.
The commission had instituted a probe earlier to examine if there was any cartelisation among traders when onion prices had touched R80 in December 2010.
Though the fair trade regulator did not find sufficient evidence of market manipulation two years ago when it conducted a similar investigation, sources within the CCI said that since hoarding was a common practice, the watchdog had decided to probe the matter once again.
All vegetable prices have shot up in the last few months, but onion has been the worst hit.
“There is a significant possibility that there is some market discrepancy and hoarding, which has pushed prices to this level and the CCI would look into the matter,” a source in the regulator's office said.
CCI chairman Ashok Chawla did not respond to messages and phone calls made by HT.
A study commissioned by the CCI last year had suggested that some cartels could be at play in the onion market and hoarding was done to keep prices high. The study, conducted by the Bangalore-based Institute for Social and Economic Change, found clear imperfections, including cartelisation and hoarding.
“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 said.
The CCI is likely to seek details and data from state governments as well. The regulator has also decided to look into the operations of the agriculture markets to ensure that there is no cartelisation or unfair play leading to determination of vegetable prices, including tomatoes and potatoes, which have also risen.
“We are collecting all the details and data to analyse the pricing pattern and role of traders to see if there are any discrepancies,” a CCI member said.