Onion Becomes Cheaper after Government Releases 1.11 lakh tonnes of Buffer Stock

On Wednesday, the Central government released buffer onions in the markets of Delhi, Kolkata, Lucknow, Patna, Ranchi, Guwahati, Bhubaneswar, Hyderabad, Bengaluru, Chennai, Mumbai, Chandigarh, Kochi, and Raipur. Along with that, onions were also disposed of in the local markets of Maharashtra, Madhya Pradesh, and Gujarat.

Around 1.11 lakh tons of onion has been released in these major markets of the country and according to the Consumer Ministry data, the Centre’s intervention of releasing buffer stock onions has helped cool down the retail prices by Rs 5-12 per kg. 

Consumer Affairs Ministry said, “Onion prices are also being stabilized through buffer stock. ….Efforts of the Centre to ease onion prices are now bearing results. Onion prices are now cheaper than last year as the average all India retail price of the key kitchen staple is ruling at kg Rs 40.13 per, while in the wholesale market it is at Rs 31.15 per kg”.

Total 1, 11,376.17 tons of onion was in the major markets till 2nd November after its release.

Following the release, Delhi’s retail onion prices have gone down from Rs 49 per kg on 20th October to Rs 44 per kg on 3rd November, similarly, Mumbai – from Rs 50 per kg to Rs 45 on 14th October, Kolkata – from Rs 57 to Rs 45 per kg on 17th October, and Chennai – from Rs 42 to Rs 37 per kg on 13th October.

The Ministry also informed that – “Onion prices had started rising from the first week of October due to rains that disrupted the supply chain.”

Guided by the twin objectives of moderating prices and ensuring minimal storage loss, the government has taken up the targeted and calibrated release of onions from buffer stock on the first-in-first-out principle, in order to bring down the rising onion prices. Also, the government has offered buffer onion to all the states and union territories at Rs 21 per kg for lifting from the storage locations. By doing this, states/union territories will be enabled to themselves take up market interventions either through direct supply to retail consumers via retail outlets or by releasing it in key markets to bring own the prices.

“The stocks are also available for supply to Central/States agencies involved in retail marketing either at an ex-storage rate of Rs 21 per kg or at the landed price after including transportation costs” – said the Ministry.

A price of Rs 26/kg for onion has been offered to Mother Dairy’s Safal and it has lifted around 400 tons from there. Buffer onion is also being supplied to the Northeastern state of Nagaland.

Price Stabilization Fund (PSF) maintains the onion buffer with an objective of effective market intervention to moderate prices.

2.08 lakh tons of onion have been procured for a buffer for 2021-22, which is a bit higher than the target of 2 lakh tons.