Onion trader Nitin Jain said traders are not keen on participating in the auctions since the searches are still in progress.
A steep rise in the onion prices has been attributed to heavy rainfall in onion growing districts of Maharashtra, Karnataka, and Madhya Pradesh, which had caused damage to the standing Kharif crop, stored onion, and seed nurseries.
Onion auctions at Lasalgaon — the country’s largest wholesale market for the bulb — came to a halt on Thursday after traders refused to participate following searches conducted by income tax officials on 12 onion traders’ homes and offices.
Farmers who had brought their produce to the Lasalgaon market were sent to the Vinchur subcommittee market a few miles away.
According to sources, the crackdown on the traders came following price fluctuations even after the Centre banned the export of onions. Wholesale onion prices at Lasalgaon have been in the range of Rs 4,000 to Rs 4,800 per quintal for the last couple of weeks.
Sources said I-T officials are inspecting records of onion auctions held at the Lasalgaon APMC in the past few months and the quantity of the produce purchased by traders. Similar searches were conducted during the same period last year.
Eighteen teams of 110 income tax officials from Nashik, Pune and Aurangabad started searches at the residences and offices of 12 onion traders in Lasalgaon, Pimpalgaon and Nashik late on Wednesday. The searches were carried out due to apprehensions that traders are resorting to hoarding and black marketing.
Onion trader Nitin Jain said traders are not keen on participating in the auctions since the searches are still in progress. Onion prices are usually high at this time, before the start of the next season, and such measures will only create panic, he said.
Market sources said traders were hinting at an indefinite bandh.
Suvarna Jagtap, chairperson, Lasalgaon Agriculture Produce Committee (APMC), said efforts were being made to ensure the auctions are held smoothly. Though the auction was diverted to Vinchur on Thursday, it is likely to be held at the APMC on Friday, she said.
Jagtap said the searches are part of routine checks conducted by the IT department to ensure traders are not hoarding stock or artificially hiking prices. Their documents are being verified, and traders are showing officials the paperwork, she said.
Due to prolonged rain this monsoon, onions stored in the onion chawls are rotting in large quantities, while heavy rain has caused severe damage to the new red onion crop. Market sources said this had led to a rise in prices.
Bharat Dighole, president, Maharashtra Onion Growers Association, said such searches will cause panic in the market. “On the one hand, the government talks of doubling farmer incomes, but then intervenes when prices rise. None of the officials had visited farmers or the market committee when prices were in the range of Rs 1,500 per quintal. But when the prices are around Rs 4,500, there is a hue and cry,” he said. Dighole said auctions should be resumed immediately.