While North India is witnessing a change in season from summer to winter, the Onion Price hike has shocked the common people. The onion price increase came months after the Government of India intervened in the matter and in August it offered onions at subsidized rates, however, imposed a 40 percent tax on the export of the same. Although the government's steps controlled the Onion Price surge to some extent, now things have started to go out of hand as many states are selling onions at Rs 70 to Rs 80/KG. Now, the question arises as to why Onion prices are raising or what is the Onion Price hike reason. To know the answer continue reading-
As per reports, Onions were selling at a retail price of Rs 30 to 35/KG during Navratri. However, as soon as Navratri and Dussehra concluded, Onion prices soared up to Rs 70/KG. As per reports, not only retail but per quintal prices of Onion have also increased. In some states, per quintal onion is priced at Rs 4000.
An onion trader at Ghazipur vegetable market was quoted saying, "The inflow of the onion is low resulting in high rates. Today the rates are Rs. 350 (per 5 Kg). Yesterday, it was Rs. 300. It was Rs. 200 before that. A week ago, rates were Rs. 200, Rs. 160 or Rs. 250 etc. The rates have gone up in the last week. The rates have risen due to a shortage in supply..."
As per reports, in the last 15 days, onion prices have soared up to 60 percent. The Onion Price hike during monsoon is quite understandable. However, the same thing happening during the advent of winter in some states has indeed raised eyebrows as it has started affecting the common people. As per a report, onions have been produced in relatively lesser numbers this year. Also, a 5 percent fall in sowing has been witnessed. Due to incessant rains and floods, the yield of the onion crops has been drastically decreased by 10 percent. As a result, the supply of onions in wholesale and even retail markets has decreased.
This year also witnessed high temperatures in February and unseasonal rainfall in March, when the rabi crop matures. Therefore, it can also be said that the impact of climate change on food production is apparent and it is turning to be an important factor that impinges on inflation.
A vegetable vendor at Ghazipur market was also quoted saying, "We are here to purchase onion. The onion rates were Rs. 50 before Navratri, now it is Rs. 70/kg. Our purchase is at Rs. 70 per kg and we will sell it at Rs. 80/kg. Earlier, it was Rs. 30-40 per kg... If this continues, the rates will reach Rs. 100/kg. The rates for onions have gone up the most... Rates for tomatoes have also gone up. Earlier, tomatoes were Rs. 20/kg, now it is Rs. 40-45 per kg. Tomatoes will also reach Rs. 70/kg if this continues."
In August 2023, the Government of India imposed a 40% export duty on onions to discourage their sale abroad and improve domestic availability. It was stated that the taxes would be applicable till December 31. India contributes over 12% of global onion trade by value, suggest reports.
The government also decided to increase the buffer stock limit to 5 lakh tone from 3 lakh tone in order to improve domestic availability of the kitchen staple. Further, onions from the buffer were reportedly sold at a subsidised rate of Rs 25 per kg through retail outlets and mobile vans of National Cooperative Consumer Federation.