As states refrain from buying onion, Centre fears stock may rot soon

Forced to import onions to check spike in prices, the Union Government now fears that the key kitchen staple may rot in godowns as states have shown little interest in buying them despite its offer to bear transportation cost.

Consumer Affairs Minister Ram Vilas Paswan said the Centre is offering onions to states at Rs 55 per kg landed cost and is ready to bear the cost of transporting the commodity.

While the Centre alone can import onions, it depends on states for retailing them to consumers. States said that by the time imported onions arrived, onion prices in the domestic market had started softening in expectation of a healthy late kharif harvest.  

 

Retail onion prices started to rise by September-end and touched a high of Rs 170 per kg in December, forcing the Union government to import onions from countries like Turkey and Egypt. In subsequent weeks, rates started to soften with the arrival of new Kharif crop in the market.

"So far, we have contracted (import of) 36,000 tonnes of onion. Of which, 18,500 tonnes of shipment has reached India, but states have taken only 2,000 tonne that too after much persuasion. We are worried about its disposal because it is a perishable commodity," Paswan told reporters.

"Tomorrow, someone should not go to court and say imported onions were rotting," he said.

He said the Centre is offering imported onions at an average cost of Rs 55 per kg and also bearing the entire transportation cost. Despite all, the state governments are not coming forward to buy them.

As per government data, retail onion prices average Rs 50 per kg in most markets. The data showed onion being priced at Rs 50 per kg in the national capital but local vendors were selling it for Rs 70-80 a kg.

Asked why prices are still high despite imports, Paswan said, "The imports are being done to improve the domestic supply and check prices. If state governments are not ready to take the imported onions, what can we do?" So far, Andhra Pradesh, Kerala, Telangana, Uttar Pradesh and West Bengal governments have taken the imported onions. Many states have withdrawn their demand, he added.

Sources said the taste of imported onions is different from the homegrown ones and consumers are not buying them when domestic onion is available at the same rate.

Stating that a shipment of 5,500 tonne was cancelled before it set on sail in the absence of demand, Consumer Affairs Secretary Avinash Srivastava said 4,000 tonne of imported onions is expected to arrive in the next two days and 14,500 tonnes by the month-end.

The government is importing onions through state-run trading agency MMTC. Imports are being undertaken from Turkey, Afghanistan and Egypt. Onion prices shot up due to 25 per cent fall in the kharif production.

Paswan also said the ministry is keeping a close watch on prices of other commodities, especially edible oils and pulses. The government will take action at appropriate time.