In view of the steep rise in onion prices across wholesale markets, the Central government has clamped down heavily on the trade. Last week, the government prescribed a stock limit of 25 tonnes and two tonnes for wholesale and retail traders respectively.
Onion trade across Nashik remained suspended on Tuesday, with traders refraining from auctioning, in protest against the stock limit imposed on the bulb by the Central government. Trade is likely to remain suspended till the issue is resolved, said Sohanlal Bhandari, director of Pimpalgaon Baswant market in Niphad taluka.
In view of the steep rise in onion prices across wholesale markets, the Central government has clamped down heavily on the trade. Last week, the government prescribed a stock limit of 25 tonnes (250 quintals) and two tonnes (20 quintals) for wholesale and retail traders respectively. This was done under the amended Essential Commodities Act, with government agencies talking about a 100 per cent year-on-year price rise in the commodity. Before these stock limits were imposed, the government had considerably eased import norms of the bulb, and back in September, exports had been banned.
Bhandari said the stock limit is non-feasible. “By the time the stock limits were announced, we had already procured more than 25 tonnes of onion in anticipation of the post-Dussehra demand from north and east Indian states,” he said. “Till the time we are unable to dispose (the stock), we will not be able to buy new stock, and thus, we have decided to suspend operations.”
He added that wholesalers and retailers outside the state are in the same predicament, and have suspended trade as well.
Nashik’s wholesale traders play a pivotal role in the country’s onion supply chain, and buy onion in bulk to supply to markets across India. Traders claim 25 tonnes is too little, given the volume they trade in. In Lasalgaon’s wholesale market in Niphad taluka – the largest wholesale market for onion in the country – around 2,000 – 3,000 tonnes of the bulb is trader per day. In a bullish market, a majority of the produce is bagged by traders with deep pockets, who tend to play the market up in the days to come.
Over the last few years, wholesale traded price for onions in Nashik has been hovering between Rs 60 and Rs 65 per kg. This is mainly due to the supply pinch faced in production states like Karnataka and Maharashtra. Since the initiatives taken by the government, prices have been corrected by almost Rs 10 per kg.
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