Shorfall, delayed production and cyclone triggered problem

Unreported marginal shortfall in production and undue delay in market arrivals of early kharif crops in Maharashtra and Andhra Pradesh triggered the onion crisis during the present lean period. The early kharif crops are harvested from September-October onward till December when the late kharif crops start arriving.

Prolonged monsoon and cyclone have hampered mandi arrivals in the two States, which were expected to contribute 12.16 lakh tonnes to the market from late September-early October onwards. Maharashtra has since scaled down its early kharif output by about 1.5 lakh tonnes.

Demand has outstripped supplies, but what is worrying the government is that there may be little respite for consumers before Diwali. Mandis will remain closed for about four days around Diwali which will further hamper supplies. Onion prices in major markets range between Rs. 65 and Rs. 90 a kg.

Taking advantage of the gap between demand and supply, Delhi traders have entered into advance contracts with farmers in neighbouring Alwar, even before the crop is harvested, say officials. The Cabinet Secretary on Friday reviewed the situation and outlined steps that should be taken immediately to augment supplies, especially in poll-bound Delhi. The States have specifically been asked to crack down on hoarders. They have been advised to waive cess on onions in the Agriculture Produce Marketing Committee markets.

Agriculture Secretary Ashish Bahuguna held a video conference with agriculture and food secretaries of onion-producing States and was assured by them that the situation will ease after two weeks. However, they also expressed the apprehension that if imports are carried, it may lead to a glut in November.

About 7 lakh tonnes of onions from Maharashtra and 3.42 lakh tonnes from Andhra Pradesh are expected to reach the market in phases after two weeks. In addition, the late kharif crop (January-March) of around 36.77 lakh tonnes is expected to arrive from Maharashtra, Karnataka, Andhra Pradesh, Gujarat and Madhya Pradesh. Karnataka has hiked its estimated production of late kharif crop to 11.05 lakh tonnes from 9.93 lakh tonnes. This will stabilise the prices.

The States have been advised to indicate their requirements to the National Agricultural Cooperative Marketing Federation of India, which will procure for them immediately and sell at near-cost price. This way profiteering by intermediaries will be checked, highly placed sources told The Hindu.

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