Centre Releases Buffer Stock to Stabilize Onion & Tomato Prices

In the midst of a spike in the costs of three major vegetables, the Centre stated that onion prices are being stabilized with the release of buffer stock, while measures are being undertaken to reduce tomato and potato rates. 

Onion supplies are being released into the market on a first-in-first-out basis in a regulated way beginning in the last week of August in an effort to temper prices and guarantee minimal storage loss, according to the statement. As a result, the retail onion price in metros on October 14 was in the range of Rs.42-57 per kg. On October 14, the all-India average retail price of onion was Rs.37.06 per kg, while the average wholesale pricing was Rs.30 per kg.

On October 14, onion was selling for Rs.42 per kg in Chennai, Rs.44 per kg in Delhi, Rs.45 per kg in Mumbai, and Rs.57 per kg in Kolkata. The food and consumer affairs ministry said in a statement that buffer stock of onion is being issued in states where prices are above the all-India average and where prices are growing over the preceding month. "A total of 67,357 tonnes have been released in key markets including Delhi, Kolkata, Lucknow, Patna, Ranchi Guwahati, Bhubaneshwar, Hyderabad, Bengaluru, Chennai, Mumbai, Chandigarh, Kochi, and Raipur until October 12," it added.

Furthermore, it stated that Grade-B onions (stocks that are below the fair average quality- FAQ) are disposed of at local markets in Maharashtra, Madhya Pradesh, and Gujarat.

In addition to releasing onions into the market, the ministry has provided onions from the buffer for Rs.21 per kg to all states and union territories for removal from storage places.

This will allow states to engage in market interventions on their own, either through direct supply to retail consumers through retail shops or by price reductions in crucial markets.

The onion stocks are also available for delivery to central and state agencies involved in retail marketing at an ex-storage rate of Rs.21 per kg or landing price after transportation charges, according to the ministry.

The retail chain SAFAL of Mother Dairy has been offered at a landing price of Rs.26 per kilogram.

With the objective of effective market intervention to control prices, the government maintains an onion buffer under the price stability fund (PSF).

In 2021-22, the 2021 rabi crop produced around 2.08 lakh tonnes of onion buffer from April to July 2021, exceeding the target of two lakh tonnes.

Tomatoes were selling for an average of Rs.41.73 per kg in India, while potatoes were selling for Rs.21.22 per kg. In the wholesale markets, potato prices were ruling at Rs.1606.46 per quintal, while tomato prices were prevailing at Rs.3361.74 per quintal.

The retail costs of potato and tomato in Delhi were Rs.20 per kg and Rs.56 per kg, respectively, according to the ministry's statement.