India Releases Buffer Onion Stocks to Curb Price Surge
By ThePip Desk
India’s government to release buffer onion stocks and launch ‘Kanda Express’ to stabilize soaring retail prices, up 45% year-on-year due to reduced kharif output.
The Indian government is preparing to release its buffer onion stocks into the open market, aiming to control the sharp increase in retail onion prices. Consumer Affairs Secretary Nidhi Khare announced plans to launch the ‘Kanda Express’ for bulk rail transportation of onions across the country.
Explaining the Price Surge
Retail onion prices have surged significantly, marking a 45% increase year-on-year. This has led to an average price of Rs 41.64 per kg nationwide, with prices in Delhi-NCR exceeding Rs 55 per kg.
- The primary cause for this price hike is a reported 5-7% decline in kharif onion output in Maharashtra.
- This reduction is attributed to both reduced acreage for cultivation and delayed monsoon rains impacting the harvest.
Government’s Intervention Strategy
To combat the rising prices, the government will release its existing buffer onion stocks directly into the open market. This measure aims to increase the immediate supply and stabilize consumer prices.
- Farmers’ cooperatives, NAFED and NCCF, have procured approximately 0.12 million tonnes for the current fiscal year’s buffer.
- Procurement prices were adjusted multiple times to encourage farmers to supply their produce, ensuring adequate stock build-up.
Introducing the ‘Kanda Express’
A new logistical initiative, the ‘Kanda Express’, will also be launched to enhance onion distribution efficiency. This system leverages rail for the bulk transportation of onions.
- The ‘Kanda Express’ will move produce from major growing regions, like Maharashtra, to key consumption centers nationwide.
- This mechanism is designed to improve the speed and scale of supply chain operations, ensuring timely availability.
Current Supply Dynamics and Future Outlook
Despite the recent price increases, farmers in states such as Maharashtra and Madhya Pradesh currently possess sufficient stocks to meet demand. Farmers are also reportedly receiving remunerative prices for their produce.
The upcoming rabi onion harvest, which contributes 70-75% of India’s total onion production, is critical for maintaining price stability. Its timely arrival is essential until kharif onions begin to arrive in October, with sowing for the kharif crop already completed in key producing states.