22 Dec : Govt on Wednesday unveiled multi- pronged measures to check high onion prices, including removal of import duties, an indefinite ban on exports and asking state agencies to import the commodity, as retail prices continued to hover around Rs 70-80 a kg.
While wholesale market prices of the kitchen staple recorded a 40 per cent drop in the major producing region of Nashik in Maharashtra, the central government expressed confidence that it will reflect in retail prices in a couple of days.
The sudden spurt in onion prices, which had played a politically sensitive role during elections over a decade ago, forced the government to abolish the five per cent customs duty and four per cent countervailing duty to boost imports.
Simultaneously, it also asked state trading agencies MMTC, STC and PEC to source onion from other countries to help augment domestic availability. The Commerce Ministry, which had earlier suspended export of onion till January 15, today converted it into an indefinite ban.
“I met CMDs of three public sector companies -MMTC, STC and PEC and asked them to look around for import contracts (for onion),” Commerce Secretary Rahul Khullar told reporters.
Onion prices soared from Rs 10-11 a kg in June to Rs 70-85 a kg following heavy rains in the producing regions of Maharashtra and Karnataka.”Prices in the wholesale market have already started showing declining trend. We are hopeful that in a couple of days it will be reflected in retail price also,” Consumer Affairs Secretary Rajiv Aggarwal told reporters.
However, it would take more than a couple of weeks for things to return to normal as fresh arrivals are expected from Haryana, Punjab, Uttar Pradesh, Bihar and Gujarat starting from December end.
Aggarwal said the Maharashtra government informed the Centre that damage due to rains is to the extent of 40 per cent of normal production, while Karnataka, Gujarat, Rajasthan and Madhya Pradesh reported 15-20 per cent damage from rotting and reduced size.
India produced 12 million tonnes of onion last year, of which Karnataka and Maharashtra account for 40 per cent.
Cabinet Secretary K M Chandrasekhar, who is monitoring the situation on an hourly basis, asked the Commerce Secretary to speed up onion imports and also states to take stringent action against hoarders.
Aggarwal claimed that the average all-India retail price of onion was only Rs 49.97 per kg, while the highest was recorded in Tiruchirapalli at Rs 75 a kg, Thiruvananthapuram Rs 73 a kg.
In Delhi, onion was selling for Rs 64 a kg.
The Consumer Affairs Ministry has also requested states to intervene in the market by directly procuring from wholesale market and selling in the retail as was being done in Delhi.
Aggarwal said the Centre has told state governments that onion movement should remain uninterrupted and markets should be kept open.
When asked whether the Centre has asked states to take action against hoarders, he said, “We have told state governments that markets should function properly”.
He said the issue of import of onion and its soaring prices would be discussed at length in a meeting of the Committee of Secretaries in New Delhi on Thursday.
“Some adhoc quantity for import of onion could be decided in tomorrow’s meeting”, he added.
According to trade and official sources, private traders have imported over 1,000 tonne of onion from Pakistan since Monday.
Meanwhile, in a bid to provide succour to commonman from heightened onion prices Nafed and NCCF have started selling at Rs 40 per kg through their 25 stores in the national capital, but the stocks were sold out in no time.
Aggarwal termed the efforts of Nafed and NCCF as “inadequate” and said the situation would improve with Delhi government pitching in.
Explaining the reason for the extraordinary price rise, the Consumer Affairs secretary said that arrival of onion in the markets of Delhi in November and so far in December have been less in comparison to last year.
While arrival of onion in the markets of Delhi was around four lakh tonnes in November 2009 it was about 3 lakh tonnes this year during the duration.
Similarly, the arrival of the veggie so far in December has been 2.17 lakh tonnes against over 4 lakh tonnes during the same period last year, he said.
Earlier in the day, Agriculture Secretary P K Basu said that onion prices are likely to fall in the next 7-10 days with the arrival of new crops.
“The steps the government has taken have helped in drastic reduction in onion prices. New arrival will come, prices will come down in next 7-10 days,” Basu told reporters.
The onion price crisis has triggered some freak actions.
Reports said an auto trader in Jharkand offered free onions on purchase of tyres while a noted television artiste in Punjab plans to give away this essential kitchen ingredient as gifts to housewives during Christmas.