Onion trade grinds to a halt after income tax raids on traders

Shiv Kumar
Tribune News Service
Mumbai, September 16

India’s main wholesale market for onion at Lasalgaon and Pimpalgaon near Nashik has come to a halt after the Income Tax department raided seven of the biggest traders who control the trade in the bulb.

“The daily auction at Lasalgaon is suspended for the second day on Saturday and farmers are being told not to bring their produce to the markets,” a trader from Lasalgaon said.

According to sources, the Income Tax department raided more than 25 premises belonging to the seven biggest onion traders at Lasalgaon and Pimpalgaon following intelligence reports that they were operating as a cartel to jack up prices ahead of the festival season.

The raids came just days after wholesale prices of onion crossed Rs 25 per kg even as farmers’ groups complained of being paid a lot less.

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After the action by the Income Tax authorities on Thursday, wholesale onion prices fell sharply to Rs 11 per kg.
“Wholesale prices of onion at the Navi Mumbai APMC is Rs 12 per kg,” an official said. Truckloads of onion are being sent directly to Mumbai, Pune and other cities after the auction of onion stopped at Lasalgaon and Pimpalgaon, sources said.

According to district officials at Nashik, more than 25 warehouses belonging to onion traders have been sealed after information about traders hoarding onion there were received.

Traders in Nashik say most of the 16 wholesale markets in and around Nashik have been shut and will reopen only on Monday after traders announce their future course of action.