Limits on stocking onions at wholesalers and retailers helps bring the bulb’s prices down


The imposition of stock limits on onion after its prices more than doubled than the last 5-year average, brought wholesale onion prices down by up to Rs 10 per kg in key consuming markets such as Delhi, Mumbai and Chennai.

For wholesalers, the limit to stock  onions has been kept at 25 tonnes while the retailers are allowed to stock up to a maximum of 2 tonnes of onion. The limit will last till the end of 2020, according to the Ministry of Consumer Affairs, Food & Public Distribution. The latest decision by the government has come after it barred onion exports last month and eased the imports earlier this week, to rein in the rising prices.

Promptly after the stocking limits order was passed, onion prices showed a declining trend. At Lasalgaon in Maharashtra, Asia’s largest wholesale onion market, onion prices dropped by Rs 5 per kg to Rs 51 per kg in just one day after the government’s order on stock limits.

Among consuming markets, government data showed that wholesale onion prices in Chennai declined to Rs 66 per kg on October 24 from Rs 76 per kg on October 23.

Similarly, the rates in Mumbai, Bengaluru and Bhopal too fell by Rs 5-6 per kg to Rs 70 per kg, Rs 64 per kg and 40 per kg, respectively, in just one day, the data showed.

According to the data, the daily arrival in Delhi’s Azadpur mandi, increased to over 530 tonnes, while it improved to 1,560 tonnes from 885 tonnes in Mumbai. In Chennai, daily arrivals rose to 1,400 tonnes from 1,120 tonnes earlier. Similarly in Bengaluru, daily arrival in mandis rose to 3,000 tonnes from 2,500 tonnes.

The all India average retail price of onion had risen by over 22 per cent on-year, last week. The prices rose by almost 115 per cent when compared to the last 5 years average. The government said that under the Essential Commodities (Amendment) Act, 2020, the stock limit can be imposed under extraordinary price rise. Simultaneous with the limiting order, the government also stepped up the disposal of onion through its own built-up onion buffer stock from the Rabi onion 2020.

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