The government will soon start offloading onion in the market from buffer, to preempt a rise in prices of the vegetable in the coming festive season.
Sources said while modal retail prices as per the department of consumer affairs data was Rs 50/kg on Tuesday, in several urban centres it has crossed Rs 60/kg.
“Given the comfortable buffer size, the government is in the position to make effective market intervention to rein in price volatility both in the wholesale and retail markets in the coming festive months,” an official told FE.
The government agencies such as farmers’ cooperative Nafed and National Cooperative Consumers’ Federation of India have procured 0.47 million tonne (MT) of onion for the price stabilisation fund buffer from the rabi 2024 harvest this year from farmers, against 0.3 MT purchased in the previous year.
These agencies have purchased onion from farmers at an average price of Rs 25/kg this fiscal, compared to procurement of staple vegetables at an average price of Rs 17/kg in FY24.
“The timely intervention and calibrated release ensured stabilization of retail prices effectively without impacting farmer realization,” according to an official note.
Overall availability of onion is comfortable with estimate 3.8 MT of onions are still storage with farmers and traders as per information collated by agriculture ministry, according to the note.
The wholesale mandi prices of onion at Lasalgaon, Nashik – the hub of the country’s onion trade on Tuesday was Rs 4400/quintal against Rs 2680/quintal reported a month back.
Inflation in onions was 60.54% in July on year because of lower production. Inflation in onion had been double digit since July 2023, when it was reported at 11.78% on year.
According to the agriculture ministry, output of onion in the 2023-24 crop year (July-June) is estimated at 24.21 million tonne (MT), a decrease of 20% compared to previous year.
So far, 0.22 million hectare (MH) of kharif onion has been sown, against 0.17 MH reported last year. The government has set a target of 0.36 MH for kharif onion this year, which is 27% more than 0.28 MH reported in 2023.
The kharif harvest of onions is expected to enter the market by the end of October and there is an expectation of a bumper harvest given the higher sowing.
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