Government reduces onion stock holding limit for retailers, wholesalers amid rising prices

The Centre has further tightened stock limits for onions to prevent hoarding by traders as retail prices soar well above the ₹100-per kg mark.

Retailers will not be allowed to stock more than five metric tonnes, according to the order issued by the Consumer Affairs Ministry on Tuesday evening. Earlier, the limit was 10 metric tonnes. The stock limit for wholesalers has also been halved, from 50 metric tonnes to 25 metric tonnes.

These limits apply to only domestically grown onions. There is an exemption clause for the imported ones, whether stocked by wholesalers, retailers or dealers, said the order.

Onion prices have hit ₹140 per kg in Mumbai, ₹125 in Kolkata and ₹120 in Chennai and ₹110 per kg in Bengaluru, according to the latest retail price data from the National Horticulture Board. While prices breached the ₹100-per kg mark in Delhi last month, they are now hovering around ₹85 per kg in the national capital.

The steep rise in prices is due to a 26% drop in the onion production during this kharif season, caused by the late arrival of the monsoon as well as excess rainfall and flooding during harvesting season in major producing States such as Karnataka, Maharashtra and Madhya Pradesh. Hoarding and black-marketing have also exacerbated the situation.

Asked about Income Tax raids in view of complaints of hoarding on Monday, Minister of State for Finance told the Lok Sabha that the Department “has recently carried out survey operations on several traders indulging in onion trade in Maharashtra, Madhya Pradesh and Delhi on the basis of information that these traders are indulging in manipulation of onion prices and cash transactions, leading to generation of unaccounted income.”

He said a preliminary outcome of such operations revealed that “most of these traders were indulging in various malpractices which, inter-alia, includes: suppression of turnover, having unaccounted stock, manipulation of books of accounts, cash sales, violation of the provisions related to restriction on cash transactions.”

The Centre has also taken steps to ban onion exports, placed orders for imports from Turkey and Egypt, created a buffer stock and offered them at a subsidised rate to States.

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Printable version | Jun 19, 2021 12:44:23 AM |

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