Centre builds record reserve of 250,000 tonnes of onions
Prices of some food items, where seasonality plays a big role, tend to be volatile. Onion is one of them. Its rates often soar, knocking household budgets.
The Union government has built a record reserve of 250,000 tonnes of onions for 2022-23 to deal with potential spikes in prices during an oncoming lean season that starts around August and lasts till December. The move is aimed at thwarting the vegetable’s volatility and keeping prices stable -- critical at a time when inflation is already in excess of 7%.
The onion buffer is being maintained by the department of consumer affairs under a price stabilization fund, which aims at effective market intervention to cool prices when availability plunges.
Prices of some food items, where seasonality plays a big role, tend to be volatile. Onion is one of them. Its rates often soar, knocking household budgets. The vegetable is a base ingredient of most Indian dishes and price spirals are almost an annual feature. Vegetables have a weightage of 6.04% in the consumer price index.
The government purchased the onions from this year’s winter-sown crop through the National Agricultural Cooperative Marketing Federation of India (NAFED) from farmers in major producing states, such as Maharashtra, Gujarat and Madhya Pradesh, an official statement said.
“The price stabilisation buffer serves the twin objectives of providing remunerative prices to onion farmers and augmenting the availability of onions at affordable prices to the consumers,” the statement said.
Winter-sown onion harvested during April-June accounts for 65% of India’s onion production and meets demand till summer crop is harvested from October-November. “It is therefore vital to successfully store onion in order to ensure the regular supply,” the statement said.
An official said open-market releases will be targeted towards states/cities where prices show an increase over the previous month and also in key agricultural markets to boost supplies after August.
Past data show onion prices usually tend to peak around September because stocks from previous crops deplete. Fresh harvests usually arrive in markets only in January. Onion is a semi-perishable vegetable produce and post-harvest losses due to weight loss, rotting and sprouting etc. are substantial.
Onion prices in Maharashtra’s Lasalgaon, which sets the prices around the country, averaged at ₹1,225 a quintal across varieties and have been holding steady so far, data from commodityinsightsx.com showed on Friday.
