In an effort to curb rising onion prices, the government on Wednesday extended the ban on hoarding the staple agricultural commodity beyond prescribed limits by another year.
“We have decided to extend stock holding limits for onion as a precautionary measures so that sufficient stocks are available till mid-September after which kharif crop would start arriving,” food and consumer affairs minister Ram Vilas Paswan told FE.
The decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA).
“The CCEA approved the stock holding limit order on onion by another year. This will enable state governments to take effective de-hoarding measures under the Essential Commodities Act (ECA), 1955,” a senior official said.
Last year, both onions and potatoes were brought under the purview of the ECA, which empowered state governments to impose upper limit for holding the stock of these two vital vegetables by traders.
The states were given the powers to impose the stock limits for potato and onion and ban hoarding beyond the set ceiling for a year which ends on Thursday.
This move follows a spike in onion retail prices across key cities mainly attributed to sluggish supply of quality onion from the key producing states. According to department of consumer affairs data, the retail prices of onion have increased marginally in Delhi to around R30-35 per kg from R20-25 per kg prevailed a month back.
Other agricultural commodities that come under the ambit of stock holding limits order include pulses, edible oils, oilseeds, rice and paddy.
To prevent spike in onion prices, the government last week had hiked the minimum export price of the commodity to $425 per tonne from $250 per tonne and is also planning to import some quantities of onions to boost domestic supply.
As per the agriculture ministry data, the country’s onion production is estimated to have declined to 18.9 million tonne in the 2014-15 crop year (July-June), as against 19.4 MT reported in the previous year.