Infra, flawed policies to blame for rise in onion prices: Experts

Onion prices, which are close to ₹150 per kg in most parts of the country, are likely to increase by 10% due to tight supplies post unseasonal rainfall. Experts

Onion prices, which are close to ₹150 per kg in most parts of the country, are likely to increase by 10% due to tight supplies post unseasonal rainfall. Experts and traders said, in addition to unseasonal rain, the policy paralysis is responsible for the surge in onion prices.

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Deepak Chavan, commodities and agriculture sector analyst, cited infrastructure inadequacy as a major reason behind onion crisis once in every three to four years. He said, as onion is a perishable item, the lack of sophisticated storage facilities has made the matter worse.

“Every year 60 lakh tonnes of onion are stored in a traditional way across country. And out of this, at least 20% gets wasted. If these 12 lakh tonnes of onion were available today, we would not have a crisis,” Chavan said.

Citing that the government declares subsidy when onion prices fall, he said, “Instead of that [subsidy], government should invest money in building infrastructure like storage facilities.”

“The government should be able to predict shortage of commodities in agrarian economies like India, where crops heavily depend on monsoon. A little delay in decision making can wreak havoc in markets,” he said.

Onion expert and director of National Agricultural Cooperative Marketing Federation of India, (NAFED) Nashik region, Nana Saheb Patil blamed government policies on mismatch of demand and supply. He said, “The monthly onion consumption of the country is around 50,000 metric tonne (MT). Currently, the daily supply is just 10% to 20% of that, and this is the major reason that onion prices crossed ₹150 per kg mark.”

Patil confirmed that about 15,908 MT onions, about 33% of total onion storage, were wasted, as they rotted in NAFED’s godowns in Nashik, Ahmednagar and Pune.

Patil recalled that during the last onion shortage in 2012, the government had imported onions from Pakistan. The Bharatiya Janata Party (BJP), which was in opposition then, had criticised policy on exports and imports. This policy paralysis continues even today.

To deal with the crisis, the government is taking steps like putting a ban on onion exports, lowering import taxes, limiting storage and procuring onions from Turkey.

Experts said the government’s move was only for consumer satisfaction and added that onion prices are not likely to come down till January end.