In order to check price rise of onions, the government may extend by another year the ban on hoarding of the key kitchen staple beyond a prescribed limit.
Last year, both onions and potatoes were brought under the purview of the Essential Commodities Act, 1955 and gave powers to state governments to impose upper limit for holding the stock of these two commodities by individuals and traders.
The state governments were given the powers to impose the stock limits on these two commodities and ban hoarding beyond the set ceiling for an year till July 2.
"Keeping in view increase in prices of onion, the Consumer Affairs Ministry has moved a Cabinet note for extension of the order that empowers state to fix stock holding limit on onion for one more year. The proposal may come for discussion this week," sources said.
The proposal aims to enable state governments take effective de-hoarding measures under the Essential Commodities Act and help tackle the problem of rising prices and improve the availability of onion for general public.
Other commodities that come under the ambit of stock holding limits are pulses, edible oils, oilseeds, rice and paddy.
Apprehending further increase in onion prices in coming days due to supply shortage, the government has already increased the minimum export price of the commodity to USD 425 per tonne and is also planning to import some quantities of onions to boost domestic availability.
Prices in both wholesale and retail markets have started increasing due to sluggish supply of good quality onion in the wake of the crop being damaged in storage in major growing states, including Maharashtra.
High storage losses are likely to reduce availability of onions in the market and put pressure on prices till the arrival of new kharif crop from mid-September.
The country's onion production is estimated to have declined to 189.23 lakh tonnes in the 2014-15 crop year (July -June), as against 194 lakh tonnes in the previous year, as per government data.
