Govt buys 71,000 tonnes of onion for buffer stock; expects retail prices to ease with normal monsoon

New Delhi, June 22 

The government has bought nearly 71,000 tonnes of onion so far this year for buffer stock, out of the total target of procuring 5 lakh tonnes for price stabilisation and it expects retail prices to ease with the progress of monsoon over most parts of the country.

According to data compiled by the Department of Consumer Affairs, the all-India average onion retail prices stood at Rs 38.67 per kg on Friday, while the modal price was Rs 40 per kg.

Till June 20, the Centre had procured 70,987 tonnes of onion, as against 74,071 tonnes procured in the same period last year, a senior official in the Department of Consumer Affairs said.

“The pace of onion procurement for price stabilisation buffer this year is largely comparable with last year’s, despite about 20 per cent decline in estimated rabi production,” the official said, adding that the government is on course to achieve targeted procurement of 5 lakh tonnes for price stabilisation.

The government will exercise the option of holding or releasing onions from the buffer in order to maintain stability in prices of onion, the official said.

The procurement price is a dynamic one, linked to prevailing market prices.

The increase in prices of onion is on account of an estimated 20 per cent shortfall in production in kharif, late kharif and rabi seasons each in 2023-24, as compared to the previous year. The reason is fewer days of rain in major producing areas, the official explained.

To control prices, the government has been taking measures in a graded manner from August last year, starting with an export duty of 40 per cent, followed by Minimum Export Price (MEP) of $800 per tonne in October 2024, and imposition of export prohibition from December 8, 2023.

These measures have helped maintain domestic availability of onion at reasonably stable prices.

Export prohibition was lifted on May 4, with MEP of $550 per tonne and 40 per cent export duty in view of substantial stability observed in major mandis like Lasalgaon in Maharashtra and the prospect of good kharif production on the back of prediction above-normal monsoon this year.

“The prolonged and extreme heatwave conditions currently prevailing over large parts of the country have impacted the production of green vegetables and led to an increase in prices of vegetables, including tomato, potato and onion,” the official said, adding that the situation is expected to ease with the onset of the monsoon over most parts of the country.

The Agriculture Ministry’s data, released in March, showed that production in 2023-24 (First Advance Estimates) is expected to be around 254.73 lakh tonnes, much lower than around 302.08 lakh tonnes last year. The drop has been caused by a decrease in output in Maharashtra (34.31 lakh tonnes), Karnataka (9.95 lakh tonnes), Andhra Pradesh (3.54 lakh tonnes) and Rajasthan (3.12 lakh tonnes), the data showed.