Rising onion prices worry govt

Written by ASHOK B SHARMA | New Delhi, Aug 26 | Updated: Aug 27 2007, 04:30am hrs
Rising prices of onions and vegetables have invited the governments concern. In the last week, the retail prices of onions in different parts of the country ranged between Rs 25 to 30 a kg.

The rising onion prices have influenced the prices of other vegetables like tomato.

The government, however, maintains that there is no shortage of onions and that the price rise is due to constraints in transportation and in the supply chain due to adverse weather conditions.

The price rise of this politically sensitive commodity, onion, in 1998 unseated the BJP-led governments in four states and had given troubles to the ruling NDA coalition at the Centre. The present UPA coalition at the Centre is, therefore, aware of what rising prices of onion can cause.

The Union finance minister, P Chidambaram has expressed concern over the wholesale price inflation rate of commodities inching to 4.10% in the week ended August 11 from 4.05% in the previous week. The prices of vegetables have risen at a faster pace on year-on-year basis till August 4 vegetable prices rose by 27.1%, wheat by 10.14%, milk by 8.6%, rice by 6.74%, pulses by 3.33% and wheat flour by 2.91%.

Expressing concern, particularly over rising vegetable prices, Chidambaram said that this demand-supply mismatch cannot be met through imports.

Onion prices started rising in the middle of this month. In August 20, the onion prices at Lasalgaon in Maharashtra rose in the range of Rs 1,000 to Rs 1,716 per quintal, while at Pimpalgaon Baswant onions were auctioned at prices ranging between Rs 1,255 to Rs 1,751 a quintal. Onion prices have shown slight declines in different parts of the country due to fresh arrivals in the market.

The situation is not due to shortage but due to disruption in the transportation and subsequent late arrivals, said Union agriculture secretary, PK Mishra.