India is shedding onion tears yet again as prices continue to rise across the country.
On Wednesday, news agency ANI quoted a vegetable vendor at Azadpur Mandi, Prasad Yadav saying, “Onion prices have gone up as there is less supply due to rains. Though situation at the mandi has not changed much due to the lockdown.”
Delhi | Vegetable vendors at Azadpur Mandi raise concerns over onion supply shortage. “Onion prices have gone up as there is less supply due to rains. Though situation at the mandi has not changed much due to the lockdown,” says vegetable vendor Ganga Prasad Yadav pic.twitter.com/JjiXxgQIGo
— ANI (@ANI) June 16, 2021
Onion prices rise almost every year in the lean supply season between September and November. In March this year, the Centre decided to boost the buffer stock of the kitchen staple by 100 per cent.
Buffer stocks are used not only to stabilize prices when necessary but also used if there’s a shortage of onions due to crop failure or bad weather. These stocks also provide farmers with better pay if a lack of demand causes a fall in prices.
Over the past two years, 2019-20 and 2020-21, the NDA government had to impose a minimum export price (MEP) to discourage exports followed by a complete ban on exports. Last year, onion exports were banned for a period of three and half months, with the government lifting the same on January 1, 2021, the report added.
According to The Print report, as of May 15, central agencies have managed to procure only 1,570 metric tonnes of onion against the initial target of 10,000 metric tonnes.
The Print quoted a senior consumer affairs official, who wished to remain anonymous, as saying, “With the initial slowdown in procurement pace, the estimated buffer stock of onion has now been decreased to 1.25-1.5 lakh metric tonnes. The procurement process was slow since its start in the third week of April, but has further slowed down in recent weeks with increasing cases and lockdown measures in major markets.”
The official explained that following heavy monsoon rains and post cyclone Tauktae in the Arabian Sea, moisture content in onions is likely to increase leading to early decay. This is likely to cause inflation again in the lean season around Diwali. “Rains make onions unfavourable for procurement and storage, because if they deteriorate rapidly, they are useless for distributing in the market to ease prices,” he said.
According to media reports, due to surging fuel rates, prices of a few vegetables have gone up in Bengaluru.
The report quoted K Lokesh, president of the Bangalore Onion and Potato Merchants Association, as saying, “We used to get nearly 250 truckloads of onions into the city every day before the lockdown, but we now get 120 only. There is excessive produce but absolutely no demand. If there is a demand and then the fuel prices go up, the hike in vegetable prices would be much higher.”
According to another report, onion prices in Kolkata are again on the upswing after a brief respite, partly because of higher carrying costs from Nashik, Bellary, and partly because of the complete exhaustion of Bengal’s own production, Sukhsagar.
Onion prices in Uttar Pradesh have surged and the price of onion in Gorakhpur alone has increased by 50 per cent directly in a week, according to reports. Heavy rainfall in some districts of the state is being directly linked to the surge in onion prices.
The wholesale price-based inflation (WPI) shot up to a record high of 12.94 per cent in May, on rising prices of crude oil and manufactured goods. This incidentally is the fifth straight month of uptick seen in WPI-based inflation. In April, 2021, WPI inflation stood at 10.49 per cent. Inflation in onion stood at 23.24 per cent in May, as compared to (-) 19.72 per cent in April.
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