Increasing Onion Prices

Onion prices could touch Rs 80 to 100/kg

What is the need for government intervention?

• Production losses: Heavy rainfall in north Karnataka has resulted in massive losses of kharif onions.
• Storage losses: The heavy rains not only destroyed the new crop in Karnataka but also took a toll on stored onions in states.
• Low shelf life: Overuse of urea by farmers has resulted in the lower shelf life of the onions.
• All these factors have resulted in rise of prices due to a supply-demand mismatch.

What steps were taken to reduce the price rise?

• First, to control prices, government banned the export of onion.
• This was followed by the relaxation of import norms that allowed easy shipping of onions from Iran, Turkey and other onion-producing nations.
• Recently, the government has reintroduced the stock limit. Wholesale traders are now allowed to stock up to 25 tonnes of onion, and retail traders up to 2 tonnes.