Govt to buy 2,000 tonnes of onion to meet festive demand

New Delhi: As prices of onions have started heading northwards ahead of Diwali, the government has decided to procure 2,000 tonne of the essential commodity to cater to festive demands.

The Ministry of Food & Consumers Affairs, in this regard, has asked Nafed and Small Farmers' Agribusiness Consortium (SFAC) to procure 1,000 tonnes onions each from the farmers to provide it to consumers at affordable prices during the peak season.

According to a senior government official, both the agencies have started the procurement process of the bulbous crop. "The initiative has been taken to make available onion, an important constituent of kitchens, at affordable prices to consumers. The procured onions would be sold through Mother Dairy's Safal and other cooperatives in different parts of the country," the official said.

Both the central agencies would procure most of the onions from the mandis of Maharashtra using the Price Stabilisation Fund (PSF).

According to market experts, the prices of onion have increased by nearly 100 per cent in one week and the traders have forecasted that it may further go up in the coming weeks as there is a shortage of the crop.

The politically sensitive commodity, which was sold at Rs 20-Rs 25 a kg in the retail market a week ago, is now being sold at Rs 40-Rs 50 per kg.

"The government is committed to provide onion at the prices with their reach. The steps have also been initiated to investigate the role of suspected traders in inflating the onion price," the official said.

Experts have also opined that price wouldn't turn moderate for one month, till the new onions hit the market. "The Lasalgaon mandi is getting demands for onions from the southern parts of the country as onion crop of Andhra Pradesh's Kurnool has been badly damaged due to sudden flood and heavy rain, which has led to the rise in wholesale onion prices in Nashik," a trader said.

As wholesale markets in Maharashtra would remain closed from October 19 to 22, wholesale traders have increased their onion procurement resulting into rise in prices of the commodity in the retail market, the trader further said.