To tame rising vegetable prices, the department of consumer affairs has decided to commence the release of stocks from the onion buffer of three lakh metric tonnes. The stocks will be released by targeting key markets in states or regions where retail prices are above the all-India average and where the rates of increase in prices over the previous month and year are above the threshold level, according to the department. The government is also exploring the disposal of onion stocks via e-auction and retail sales on e-commerce platforms.
"The quantity and pace of disposal will also be calibrated with the prices and availability situations with the objective of making onion available to consumers at affordable prices. Apart from market disposal, it was also decided to offer to the States at discounted rates for sale through retail outlets of their consumer cooperatives and corporations," says the department.
The decision by the government comes amidst several reports pointing that the price of quality onions would nearly double to a whopping ₹55 to ₹60 per kg by next month.
According to the department, the buffer amount of three lakh metric tonnes will be enhanced further if the situation demands. In June and July, the two governmental nodal agencies i.e. NAFED (national agricultural cooperative marketing federation of India) and NCCF (National Cooperative Consumer Federation) procured 1.50 lakh metric tonnes each of rabi onion from Maharashtra and Madhya Pradesh.
The department says that this year about 1,000 MT had been irradiated and stored in controlled atmosphere storage.
"The Government has been maintaining an onion buffer under the price stabilisation fund to check the volatility in prices of onion. The annual buffers have been built by procuring onions from the rabi harvest for release in major consumption centres during the lean season. Onion buffer size has tripled in the past four years; from 1.00 lakh metric tonne in 2020-21 to 3.00 lakh metric tonne in 2023-24. The onion buffer has played a key role in ensuring availability of onion to the consumers at affordable prices and in maintaining price stability," says the department.
Notably, since the past few weeks the country has witnessed a substantial increase in vegetable prices owing to supply-chain constraints and weather-related disruptions. The finance ministry has earlier said that the Reserve Bank of India and the government continued to maintain an approach for appropriate and timely policy response amidst the rising food prices in the country.
RBI governor Shaktikanta Das, on Thursday, cautioned that a substantial increase in headline inflation would occur in the near term led by the recent spike in prices of tomatoes, cereals and pulses.
"The month of July has witnessed an accentuation of food inflation, primarily on account of vegetables. The spike in tomato prices and a further increase in prices of cereals and pulses have contributed to this. Consequently, a substantial increase in headline inflation would occur in the near term," Das said.
