Onion News: Government buys 71,000 tonnes of onion for buffer stock, retail prices expected to come down with normal monsoon

New Delhi: The government has so far procured about 71,000 tonnes of onion for buffer stock this year out of the total target of procurement of 5 lakh tonnes for price stabilisation and expects retail prices to come down with the progress of monsoon in most parts of the country.

According to data compiled by the Department of Consumer Affairs, the all-India average onion retail price on Friday was Rs 38.67 per kg, while the model price was Rs 40 per kg. A senior official of the Department of Consumer Affairs said that till June 20, the Centre has procured 70,987 tonnes of onion, while 74,071 tonnes were procured during the same period last year.

The official said, “This year the pace of onion procurement for price stabilization buffer is at par with last year, although Rabi production has declined by about 20 per cent.” He said the government is moving towards achieving the targeted procurement of 5 lakh tonnes for price stabilization. The official said that to maintain stability in onion prices, the government will opt for holding or releasing onions from the buffer. The procurement price is a dynamic price, which is linked to the prevailing market prices. The official said that the increase in onion prices is due to a reduction of about 20 per cent in Kharif, Late Kharif and Rabi in 2023-24 as compared to last year due to less rains in the main producing areas. The government has been taking steps in a phased manner since August last year to control prices.

It started with a 40 per cent export duty, followed by a minimum export price (MEP) of $800 (Rs 66,850.36) per tonne in October 2024 and an export ban from December 8, 2023. These measures have helped maintain domestic availability of onion at reasonably stable prices. In view of adequate stability in major mandis like Lasalgaon in Maharashtra and the possibility of good kharif production based on the forecast of above normal monsoon this year, the export ban was lifted from May 4, 2024 and a MEP of $550 (Rs 45,959.62) per tonne and an export duty of 40 per cent was imposed.

“The prolonged intense heat wave prevailing in large parts of the country has affected the production of green vegetables and led to a rise in the prices of vegetables including tomatoes, potatoes and onions,” the official said. He said the situation is expected to improve with the onset of monsoon in most parts of the country. In March, the Union Agriculture Ministry released onion production data. According to the data, onion production is expected to be around 254.73 lakh tonnes in 2023-24 (first advance estimate), as against around 302.08 lakh tonnes last year. This is due to a decrease in production of 34.31 lakh tonnes in Maharashtra, 9.95 lakh tonnes in Karnataka, 3.54 lakh tonnes in Andhra Pradesh and 3.12 lakh tonnes in Rajasthan, the data shows.