Only West Bengal, Telangana impose stockholding limits on onion, potato

Written by Sandip Das | New Delhi | Updated: Sep 11 2014, 08:41am hrs
Two months after the government brought onion and potato under the Essential Commodities Act (ECA), 1955, which allowed states to impose stockholding limits, only two states West Bengal and Telangana have issued the relevant orders.

According to a consumer affairs ministry official, in last two months, onion and potato prices have stabilised; which had led most of the states against issuing stock holding limits for the two key agricultural commodities.

In July, the Cabinet Committee on Economic Affairs (CCEA) had empowered the state governments to fix stock holding limits for the retailers in a bid to increase supplies in the market which for curbing rising prices.

Following the CCEA meeting, telecom minister Ravi Shankar Prasad had said six states Delhi, Chhattisgarh, Madhya Pradesh, Mizoram, Tripura and West Bengal had asked the centre to make necessary changes in the ECA.

The official said, the retail prices of onions and potatoes have been prevailing around R25-R30 a kg in the last six weeks. Traders say that there is enough potato stocks in the country to meet the domestic demand in the next few months.

Recently, Maharashtra, the biggest producer of onions, had refused to impose stock holding limits, stating that it made little sense to hoard onions since their shelf life is just a couple of months.

Meanwhile, with the key onion growing areas Madhya Pradesh, Rajasthan, parts of Maharashtra and Karnataka getting sufficient monsoon rains in the last six weeks or so, the prospects of kharif crops have improved thus leading to stability in onion prices.

Besides the governments decision to import about 3 lakh tonne of onions to meet expected rise in demand in October has also led to cooling of prices.

The stability in onion prices in the last two months had led to the Cabinets decision of slashing minimum export price (MEP) to $350 per tonne last month from $500 per tonne imposed in July.

The government had imposed higher MEP to discourage exports as domestic prices started to rise sharply in July to deficit rainfall in key growing regions.

The government had imposed stock holding limits for onions and potatoes following a sharp spike in retail prices of two commodities two months back.