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Onions: Take hoarders to task, govt tells states

Last updated on: December 22, 2010 16:29 IST

Onions: Take hoarders to task, govt tells states

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The Centre on Wednesday asked states to take stringent action against hoarders and directed the commerce ministry to speed up onion imports as part of measures to ease the crisis over spiralling onion prices.

Cabinet secretary K M Chandrasekhar, who is personally monitoring the situation, has told commerce secretary Rahul Khullar to 'speed up' onion imports to augment domestic availability and check rising prices of onions, which are ruling at Rs 70-85 per kg in retail markets across the country.

Official sources said the cabinet secretary has also asked the Railway Board to provide more rakes for expeditious movement of onions from producing regions to different parts of the country.

"The state governments have been asked to take stringent action against hoarders," sources said.

The cabinet secretary will review the situation on Thursday with the secretaries of the agriculture and consumers affairs ministries, they said.

Meanwhile, in a bid to cool the skyrocketing retail prices, government has abolished import duties on onion and banned its exports for an indefinite period even as wholesale prices started showing signs of decline.

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Agriculture secretary P K Basu expressed confidence that the retail prices would come down in 7 to 10 days with the expected arrival of fresh crops.

Deputy Chairman of Planning Commission Montek Singh Ahluwalia said the spike in onion prices was only a temporary phenomenon due to unseasonal rains.

"To counter the sudden and unexpected rise in prices of onions, the department of revenue has brought down customs duty and countervailing duty to zero," finance secretary Ashok Chawla said.

The government also notified the ban on export of all varieties of onion till further orders. The steep hike in onion prices set alarm bells ringing in the government, which initially suspended export of ban till January 15, 2011 and later banned it till further orders.

Onion imports hitherto attracted customs duty of 5 per cent while counterveiling duty had been fixed at 4 per cent. Countervailing duty is levied to protect domestic producers.

Abolition of import levies, Chawala said, would help in increasing supplies through imports. On the possible sources of imports, the finance secretary, said, "How much and from where, I can't say at this moment."

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These steps come amid a sharp rise in the price of onions up to Rs 70-85 per kg in retail markets across the country from just Rs 35-40 a few days ago.

However, following the earlier decision to suspend exports, the wholesale prices had already started showing a dip.

Wholesale rates of onions in Delhi and the main producing region of Nashik on Wednesday fell by up to 42 per cent, but retail prices of the commodity continued to rule at Rs 70-80 per kg in the national capital.

In the wholesale market of Lasalgaon, in Nashik district of Maharashtra, onion prices fell to Rs 3,702 per quintal from Rs 5,200 per quintal on Tuesday, as per National Horticultural Research and Development Foundation (NHRDF) data.

Likewise, in Pimpalgaon, wholesale rates for onions fell by 42 per cent to Rs 3,134 per quintal from Rs 5,411 per quintal on Tuesday. In Manmad, wholesale prices fell by 36 per cent from Rs 4,500 to Rs 2,900 a quintal, the data showed.

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The impact of the fall in wholesale onion prices in Nashik was felt in Delhi's Azadpur wholesale market too. Wholesale prices of onions crashed by up to 29 per cent in comparison to on Tuesday's rates in the Azadpur market -- which is Asia's largest fruit and vegetable market -- due to higher stock availability, official and trade sources said.

Rajasthan variety onions were being sold at Rs 3,550 per quintal in the Azadpur market today, compared to Rs 5,000 per quintal on Tuesday.

Similarly, Nashik variety onions were sold at a price of Rs 4,250 per quintal as compared to Rs 5,250 a quintal on Tuesday, a 19 per cent fall.

Though wholesale prices of onion have come down, it will take some time before they have an impact on retail prices, traders said.

However, market experts said the effect of these measures could be seen on the retail prices only after a few days.

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The increase in prices of onions has been on account of damage suffered by crops in the key-producing states of Maharashtra, Gujarat and a few Southern states due to excessive rains. This had led to large-scale hoarding by some traders.

According to sources in agri-cooperative Nafed, which regulates export of onions, total overseas shipment of the vegetable item in November was about 1.10 lakh tonne.

In December, before the decision to suspend exports was taken, the quantum of export was 10,725 tonne.

The exports were mainly to the Gulf countries like Bahrain, Qatar, Dubai, besides Bangladesh and Sri Lanka.

"Onion prices will remain high for the next 2-3 weeks and the situation is likely to improve only after that," Food and Agriculture Minister Sharad Pawar had said.

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According to reports, a small 450-tonne consignments of the commodity from Pakistan was on the way into the country across the Punjab border.

A few truck loads of Onion had arrived in Punjab from Lahore on Monday.

According to an official, as many as 13 truck loads (5 to 15 tonnes per truck) of Onion had been imported from Pakistan. Compared to the exorbitant domestic prices, the price of the onions imported from Pakistan stood at Rs 18-20 per kg.

A worried Prime Minister Manmohan Singh, whose government has been grappling with high inflation for almost a year, has also intervened.

He on Tuesday asked the agriculture and consumer affairs ministries to take effective steps to rein in onion prices.

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Onion free on purchase of tyre

A four-wheeler tyre seller has been offering onion free on purchase of tyre from his shop in Jamshedpur on Wednesday.

"We are offering five kg onion free on the purchase of a truck tyre and one kg on the purchase of a car tyre," Satnam Singh Gambhir, a tyre seller of Kalimati Road in Sakchi said.

Gambhir is also the president of All India Sikh Students' Federation of Bihar and Jharkhand.

He said the move was meant to show discontent among people for heavy rise in onion price for the past few days.

Earlier, he gave discount on the purchase of tyre to encourage people to cast votes during the last assembly polls in Jharkhand.



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