After a month-long break, the National Agricultural Cooperative Marketing Federation (NAFED) has resumed procuring onions from Lasalgaon, country’s largest wholesale market for the bulb, and neighbouring Agriculture Produce Market Committees (APMCs) under the Centre’s Price Stabilisation Fund. “Our main target markets are Delhi and other metropolitan cities such as Chennai and Kolkata. The procurement is being done with a view to prevent a possible hike in onion prices,” said Nanasaheb Patil, director, NAFED. According to Patil, the procurement which commenced in September was stopped after a while when prices dropped below Rs 1,400 per quintal.
Jaydutta Holkar, chairman of Lasalgaon APMC, confirmed the development and said that the agency has begun procuring onion for the Delhi markets. “The procurement had commenced last month but had stopped after prices fell. Now, the process has restarted although the purchases are not very high, barely a couple of trucks or so (one truck contains 10 tonne),” he said. The procurement may pick up later, senior officials of the market felt. Modal prices at Lasalgaon touched Rs 2,375 per quintal on Thursday with minimum prices at Rs 1,000 per quintal and maximum at Rs 2,701 per quintal. The arrivals were at 5,700 quintals on Thursday as compared to 13,599 quintals on Wednesday when modal prices were at Rs 2560 per quintal.
Some of the officials of Nafed, who did not wish to be named, pointed out that the shortage in the market is not so high to warrant the purchase. The officials said that although rains had damaged around 50% crop in Andhra Pradesh and Karnataka, the harvest has been delayed in Maharashtra due to late plantation. Officials pointed out that even if there is a drop of 20% in production in Maharashtra because of the recent rains, the situation is manageable and new arrivals should start hitting the markets in a couple of weeks. Moreover, the tie-up for retail outlets for sale of onions in Delhi is yet to happen, Patil said. Last month, the agency was procuring some 200 tonne onion a day for a couple of weeks.Prices of onion had fallen by nearly Rs 6-8 per kg in September over the last one month. According to some industry observers, NAFED is using this as opportunity to procure onion and build a buffer for market intervention in case prices rise. Patil said talks were in progress with Mother Dairy for selling the onion through their outlets. Mother Dairy had not given permission for sale of onion last month, Patil added.
Nafed officials said that there is no specified target for procurement. Industry sources pointed out that about Rs 500-700 crore has been set aside by the government for procurement purposes. Nafed may expand procurement to other markets as well, sources said. At present, the consumer affairs ministry is closely monitoring onion prices. According to market sources, some of the traders were allegedly summoned to Delhi and told to ensure that there is no price hike and therefore there is a panic situation in the market. Highly placed sources said that while traders were not speaking about this openly. there is pressure on them to maintain prices and therefore there is not much buying happening.
Last month a delegation from the Centre led by top officials of the ministry of consumer affairs, food and public distribution was in Lasalgaon to ascertain the reasons behind escalating onion prices at the start of the month. Following the visit, the Centre had asked states to ensure that prices of essential commodities are kept under control and to especially take adequate measures to check traders/dealers of onions to ensure adequate availability. As a result, states can now impose stock limits on onions and undertake various measures, such as dehoarding operations, action against speculators and profiteers. According to the government’s estimates, India’s onion output in 2016-17 (Jul-Jun) is seen at 21.5 million tonne, up from 20.9 million tonne in the previous year. Supplies of onion are expected to be low in the southern parts of the country, with impending drought for the second straight year in Karnataka, the second largest producer of onion in the country. Nearly 70% of Karnataka’s onion crop is reported to have been damaged because of drought in the state.