Centre Releases Onion Buffer Stock in a Targeted Manner to States

To prevent a sharp increase in retail onion prices, the Centre announced on Friday that it has begun offloading buffer stock in a calibrated and targeted manner to states where prices have increased in recent months.

The buffer stock is being released even in the Lasalgaon and Pimpalgaon wholesale onion mandis in Maharashtra to supplement supply in these markets, according to a statement from the Consumer Affairs Ministry.

According to the ministry, the states were offered onion at Rs 21/kg ex-storage locations. It was also stated that the Mother Dairy's Safal outlets had been supplied at Rs 26/kg inclusive of transportation costs.

Rise in Onion Prices

According to the ministry's data, retail onion prices have been gradually rising in recent weeks. On February 18, onion prices were Rs 37/kg in Delhi and Chennai, Rs 39/kg in Mumbai, and Rs 43/kg in Kolkata. The ministry also stated that late Kharif (summer) onion arrivals have been consistent and are expected to continue until Rabi (winter) arrivals begin in March 2022.

According to the report, the all-India average onion price was 22.36 percent lower than the previous year as of February 17. According to the ministry, onion prices remained relatively stable in 2021-22 as a result of effective market intervention via the Price Stabilization Fund (PSF).

Similarly, the average retail price of potatoes in India was 6.96% lower on February 17th, at Rs 20.58/kg, compared to the previous month.

"Potato sowing has been delayed in the southern part of West Bengal due to cyclone Jawad," the ministry said. "However, the State reported that crop area has recovered almost to last year's level." The total crop area for 2021-22 is expected to be comparable to last year, according to the report.

The PSF scheme provides interest-free advances to states in exchange for the establishment of a State-level Price Stabilization Fund on a 50:50 sharing basis (75:25 in the case of NE States). So far, six states have drawn the advance, namely Andhra Pradesh, Assam, Odisha, Tamil Nadu, Telangana, and West Bengal, with a total of Rs 164.15 crore released as Central share.

These states have the resources and authority to intervene in order to keep the prices of essential food commodities under control. "Other states have also been requested to establish the PSF for state-level interventions to control price rises in essential food commodities," the statement continued.

In the case of tomatoes, prices have fallen in the last month but have remained slightly higher than the previous year's level.

The all-India average price of tomato as of February 1 was Rs 26.69/kg, which was lower than the previous month. Prices will fall further in the coming week as arrivals in north India pick up. Arrivals in South India will also increase in the coming week and will pick up until the end of February, according to the report.