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Farmers' protest over onion stock leads to price fall

By Dilip Kumar Jha
October 01, 2019 13:01 IST
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With auctions unable to proceed, the median onion price declined 17 per cent or Rs 6 a kg to trade at Rs 30 a kg on Monday, with arrivals of around 500 tonnes. 

Onion auctions at the Lasalgaon Agriculture Produce Market Committee, Asia’s largest bulb selling mandi, were affected on Monday amid farmers’ protest against the stock limits and export ban. 

The median onion price declined 17 per cent or Rs 6 a kg to trade at Rs 30 a kg on Monday, with arrivals of around 500 tonnes. 

“Onion auctions were halted on Monday due to farmers’ unwillingness to sell their commodity at lower prices. The auction resumed in the evening following a meeting with the district magistrate,” said Jaydatta Sitaram Holkar, chairman, Lasalgaon APMC. 

Thousands of farmers gathered at the Lasalgaon APMC and marched towards the collector’s office. Sources said that the collector assured them to give them a couple of days to adhere to the stock limit guidelines. 


The protest erupted after farmers came with their cartloads of onions from all across the state to cash in on the higher prices. But they were not informed about the stock limits imposed by the government on retailers (cap of 100 quintals) and wholesalers (cap of 500 quintals). Onion prices crashed, resulting in farmers’ protest. 

“By imposing the stock limits, the government forcing farmers towards suicide. Those who had booked the commodity at a high price will have to incur a huge loss due to the decline. How would they recover the loss?” asked Sanjay Sanap, owner, Shivkrupa Traders, a large wholesaler in Nashik. 

He said many farmers were not aware of the government’s stock limit decision on Sunday. “Hence, they had brought in a huge quantity of onions to the mandi. But, the price decline was a big blow to them,” he said. 

According to Holkar, wholesalers and retailers would cross the stock limit quantity fixed by the government by doing normal business. 

“After purchasing onion in auctions, traders require at least two days for shorting, grading and packing. This is the normal practice. Even if a wholesaler or a retailer purchases 200 quintals or 50 quintals of onion daily, respectively, their holding will be accumulated to 600 quintals and 150 quintals, respectively, in three days (Saturday, Sunday and Monday). Time must be given for adhering to the stock limit guidelines,” said Holkar. 

The government earlier this month had announced a minimum export price (MEP) $850 a tonne to discourage onion exports and curb rising prices. 

Onion prices in retail are quoted between Rs 60-80 a kg across the country. The Delhi government has started selling 5 kg of onion per family at Rs 23.95 a kg to provide some relief to consumers.

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Dilip Kumar Jha in Mumbai
Source: source

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