As onion prices hit Rs 80: CCI seeks information from state govts

Sep 22 2013, 15:57 IST
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CCI has aske state governments to provide information so as to detect presence of any malpractice that could have possibly contributed to the soaring onion prices in India CCI has aske state governments to provide information so as to detect presence of any malpractice that could have possibly contributed to the soaring onion prices in India
SummaryCartelisation and hoarding were factors behind high onion prices in 2012.

With onion prices continuing to rule high across the country, fair trade regulator Competition Commission of India (CCI) is seeking information from state governments to check whether market entities are indulging in cartelisation.

CCI keeps a tab on anti-competitive practices, is looking into the issue of persisting high prices of onion in the recent months.

Currently, they are hovering in the range of Rs 65-80 per kg in the retail market.

Sources said the Commission has started writing to state governments seeking information on their onion markets.

Maharashtra, Gujarat and Andhra Pradesh are among the major onion producing states.

There have been concerns voiced that cartelisation and hoarding by traders and other entities is jacking up the prices of the edible bulb.

According to sources, CCI will need strong evidence on anti-competitive practices if it is to investigate the issue.

The fair trade regulator is now trying to get more information on trends and practices with regard to onion markets, they added.

On rising onion prices and possibility of unfair trade practices, CCI Chairman Ashok Chawla said the Commission is looking at whether the issue needs to be investigated.

"We will see how it plays out further. We will see whether it warrants an examination or not," he told PTI.

Onion prices have been a politically sensitive issue and the steep jump in rates has come when elections are scheduled in some states within a few months.

"This is again an issue on which the Commission had spent some time in the past...and come to a conclusion that the markets don't seem to be functioning very well. But there was no evidence of cartelisation," Chawla said.

He noted that if there is hoarding of the commodity, then the matter would not fall under the ambit of the Commission.

Chawla said: "Press reports again indicate that for some reason there has been an increase in onion prices. They have been talking about hoarding etc. Now if it is hoarding, that is what the newspapers seem to be suggesting, then it is not for us to deal with it. It is for the government and the state governments to handle. We will see and at this stage we cannot say anything. We will see if we need to examine it further."

In 2012, a study instituted by the CCI found there were clear imperfections, including cartelisation and hoarding, which impact the price of onions. The study was conducted by the Bangalore-based Institute for Social and Economic Change.

"Results of seasonal indices, correlations, daily, monthly arrivals, their prices, etc, indicated existence of anti-competitive elements in the onion markets.

"A few big traders having well-connected networks with market intermediaries in other markets seem to play a major role in hoarding for expected high prices," the study had found.

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