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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.
