The government’s price control measures follow a three-fold increase in wholesale prices at the benchmark Lasalgaon market in Maharashtra in the past four months. Between August 17 to August 24, onion prices at the Lasalgaon market had jumped by 30% while the retail onion prices have crossed ₹70/kg at many places in the country.
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“Fundamentals like inferior quality of onions in government’s buffer stock as well as the stock in private hands, expected delay of more than a month in the arrival of the kharif crop, good export demand and uncertainty about the crop from south India which will be harvested during next few weeks are expected to keep onion prices firm,” said an onion exporter, who did not want to be identified. Global onion shortages are also expected to support domestic onion prices, said trade insiders.
“After many years, we are observing a simultaneous shortage of onions in India and the world. Egypt and Turkey have smaller crops, Pakistan’s onion has become more expensive than the Indian onion while supplies from Iran have dwindled due to the war,” an onion trader from Maharashtra said on the condition of anonymity.
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The Ministry of Consumer Affairs has begun retail sales of onions in Delhi from Thursday as the first Kanda Express reached the capital carrying onions from the government’s buffer stocks.
However, people familiar with the development said the Central Warehousing Corporation, which is handling the buffer stock, is facing difficulties in loading the railway rakes and trucks as removing inferior quality onions has proved a challenging task for the labour. The Kanda Express is a special freight train service to transport bulk quantities of onions quickly from production hubs in Maharashtra to major cities.