It's a crying shame onions are selling at Rs 80 a kilo
The minister said he can do nothing to control the price.
The retail price of onions has skyrocketed to Rs 80 per kg in the capital. The situation is equally teary in other cities like Mumbai, Kolkata, Chandigarh, with the price hovering between Rs 50 and Rs 80 a kilogram, which is more than double their actual price. This has added to ordinary citizens' kitchen woes, initiated by the exceptional price rise of tomatoes and eggs earlier this month.
According to a PTI report, wholesale and retail prices are rising because of lower arrivals from the key growing states of Maharashtra, Karnataka and Madhya Pradesh. After an emergency meeting on Wednesday, consumer affairs minister Ram Vilas Paswan said he can do nothing to control the price.
The spike can’t be called sudden as price fluctuations of onions and tomatoes are quite normal. But the prices have remained high longer than usual. Last month, the minister termed the price rise as “seasonal”, which was supposed to come down after new crops arrived. State-run MMTC (Metals and Minerals Trading Corporation of India) also floated a global tender to import 2,000 tonnes of onions. NAFED (National Agricultural Cooperative Marketing Federation of India) and SFAC (Small Farmers’ Agribusiness Consortium) were asked to buy onions directly from the farmers to check price rise. That the price graph did not move as speculated proves the ministry's failure to take timely action against hoarding and exports. And there are other reasons too.
Seasonal reasons behind yearly price rise
Onions have seasonal varieties depending on the time they are sown. Rabi onions are sown in December-January and harvested in April-May, when it is about time to sow the kharif crop, which is harvested in October-November. There is another late kharif variety, which is sown in August-September and harvested in January-February. Every year, onions' price rises during October-November when the rabi stocks are over and the kharif onions are just entering the market.
But that is just a temporary phase which does not explain this situation, which has not improved even after the arrival of fresh crops.
Erratic rainfall
This is not the first time that onion prices are on the rise. Maharashtra, Madhya Pradesh and Karnataka contribute the maximum to India’s onion production. And all but Madhya Pradesh experienced unusual monsoon this year. A deficit in rainfall hit Karnataka during August at the time of planting. As a result, the plantation area was reduced and sowing was delayed. Later, in September, Karnataka received excess rainfall, which again damaged crops. Maharashtra was hit by unseasonal rains too. Supplies from Rajasthan and Gujarat were also hit by torrential downpour. This year, the area under onion cultivation had reduced to 1.90 lakh hectares in 2017-18 from 2.65 lakh hectares in 2016-17.
And the price rise, felt across the country now, started back in August. However, it was not acute as the rabi stock was still there.
Problem of plenty in Madhya Pradesh
Unlike the other states, Madhya Pradesh had a problem of plenty this year, which resulted in a crash of price. The farmers were forced to sell onions at a lower price as those onions had lower shelf-life. In an attempt to help the distressed farmers, who were not getting a remunerative price for their produce and started dumping onions on the road, the Madhya Pradesh government offered a minimum support price of Rs 8 per kg. Farmers from neighbouring states, too, sold onions to Madhya Pradesh farmers to fetch better prices, reducing the stock.
No storage
According to reports, the Madhya Pradesh government purchased more than eight lakh metric tonnes of onions, though it had no storage facility for more than 50,000 metric tonnes. The stock was kept in open areas, allowing it to rot faster. Some stock was also destroyed. Though this is not directly responsible for the recent spell of price rise, the lack of proper storage facilities must be blamed. The surplus stock, which could have been used now, was dispensed with at that time.
Export of onions
According to National Horticulture Research and Development Foundation data, India's onion exports had doubled in 2016-17 over the previous year. Compared to 12 lakh tonne onions exported in 2015-16, India's onion exports stood at 24 lakh tonnes in 2016-17.
It is a recent development that the government took notice of it and imposed a minimum export price (MEP) of $850 per tone. It had been scrapped in December 2015, leading to a rise in exports.