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With onion prices becoming a hot political issue, the Centre on Thursday said prices of the kitchen staple would abate soon.
The high prices are likely to figure in the Chhattisgarh Assembly elections, due next month. The commodity has already become an issue in the Delhi polls, forcing Chief Minister Shiela Dikshit to discuss the matter with Union Food Minister K V Thomas and Agriculture Minister Sharad Pawar.
“Onion shortage is a temporary situation. Heavy rains have affected crops in Karnataka and Maharashtra. Total area under the crop is higher than last year. No drop in production is expected,” Pawar told reporters after a meeting of a group of ministers (GoM) over the issue.
Commerce Minister Anand Sharma had similar views, saying there was no genuine scarcity and prices were expected to stabilise in a few weeks.
Prices touched Rs 100 a kg in some major cities as supplies remained tight. They will fall in the coming weeks, as higher arrivals are expected from Maharashtra, Karnataka and Rajasthan, said Pawar.
“Production is good. The question is when the crop will come in a big way to the markets,” he said. Pawar said he is worried once the new crop arrived in the market, there would be a glut, causing harm to farmers.
He, however, tried to distance the government from the spiralling prices. “In Nashik, farmers get Rs 45 a kg. I don’t understand why it should sell at Rs 90 a kg here. The government does not control onions, nor does it sell onions. Prices are determined by the market.”
Sharma said: “I expect prices to stabilise in a few weeks. We cannot blame exports because the minimum export price (MEP) has been raised and there are hardly any exports.”
The global price of onion is $500-550 a tonne, against $850 a tonne in domestic markets.
According to Sharma, there was crop loss due to heavy rains and this encouraged hoarding.
When asked whether onions will be declared an essential commodity, Pawar said: “There should not be any restrictions. There should be a free market for selling onions.”
Onion prices had played a role 15 years ago in bringing the Congress government to power in the Delhi Assembly elections. Since then, Dikshit has been the chief minister for three terms. This time, however, the tables seem to have been reversed, with Dikshit having to defend the onion price issue. “The situation is serious. We are trying to stabilise the prices. We will write to the Election Commission to allow us to restart sale of onions through tempos (mobile vans),” she said after her meeting with Thomas and Pawar.
Traders and hoarders are taking advantage of the situation. National Agricultural Cooperative Marketing Federation of India Ltd (Nafed) has been asked to improve supplies on a no-profit no-loss basis, Dikshit said.
She said 8,000 quintals of onions have arrived in Delhi, which could help ease prices.
She said a team had been sent to Maharashtra to negotiate price and get onions. “Prices in Pune have fallen to Rs 40 a kg. The Maharashtra government has promised it will supply more onions to Delhi,” Dikshit said.
She added the government would amend the Agriculture Produce Marketing Committee Act. “Delhi is not a producing state but a consuming and trading state. Control of prices has to be there in producing states,” she noted.
The Prime Minister’s key economic advisor, C Rangarajan, on Thursday attributed the spiralling prices of onions to supply constraints and said it would have only a temporary impact on inflation.
The high prices are likely to figure in the Chhattisgarh Assembly elections, due next month. The commodity has already become an issue in the Delhi polls, forcing Chief Minister Shiela Dikshit to discuss the matter with Union Food Minister K V Thomas and Agriculture Minister Sharad Pawar.
“Onion shortage is a temporary situation. Heavy rains have affected crops in Karnataka and Maharashtra. Total area under the crop is higher than last year. No drop in production is expected,” Pawar told reporters after a meeting of a group of ministers (GoM) over the issue.
Commerce Minister Anand Sharma had similar views, saying there was no genuine scarcity and prices were expected to stabilise in a few weeks.
Prices touched Rs 100 a kg in some major cities as supplies remained tight. They will fall in the coming weeks, as higher arrivals are expected from Maharashtra, Karnataka and Rajasthan, said Pawar.
“Production is good. The question is when the crop will come in a big way to the markets,” he said. Pawar said he is worried once the new crop arrived in the market, there would be a glut, causing harm to farmers.
He, however, tried to distance the government from the spiralling prices. “In Nashik, farmers get Rs 45 a kg. I don’t understand why it should sell at Rs 90 a kg here. The government does not control onions, nor does it sell onions. Prices are determined by the market.”
Sharma said: “I expect prices to stabilise in a few weeks. We cannot blame exports because the minimum export price (MEP) has been raised and there are hardly any exports.”
The global price of onion is $500-550 a tonne, against $850 a tonne in domestic markets.
According to Sharma, there was crop loss due to heavy rains and this encouraged hoarding.
When asked whether onions will be declared an essential commodity, Pawar said: “There should not be any restrictions. There should be a free market for selling onions.”
Onion prices had played a role 15 years ago in bringing the Congress government to power in the Delhi Assembly elections. Since then, Dikshit has been the chief minister for three terms. This time, however, the tables seem to have been reversed, with Dikshit having to defend the onion price issue. “The situation is serious. We are trying to stabilise the prices. We will write to the Election Commission to allow us to restart sale of onions through tempos (mobile vans),” she said after her meeting with Thomas and Pawar.
Traders and hoarders are taking advantage of the situation. National Agricultural Cooperative Marketing Federation of India Ltd (Nafed) has been asked to improve supplies on a no-profit no-loss basis, Dikshit said.
She said 8,000 quintals of onions have arrived in Delhi, which could help ease prices.
She said a team had been sent to Maharashtra to negotiate price and get onions. “Prices in Pune have fallen to Rs 40 a kg. The Maharashtra government has promised it will supply more onions to Delhi,” Dikshit said.
She added the government would amend the Agriculture Produce Marketing Committee Act. “Delhi is not a producing state but a consuming and trading state. Control of prices has to be there in producing states,” she noted.
The Prime Minister’s key economic advisor, C Rangarajan, on Thursday attributed the spiralling prices of onions to supply constraints and said it would have only a temporary impact on inflation.
