PM steps in to stem onion prices

PM steps in to stem  onion prices

“Onion prices will remain high and the situation is likely to improve only after two to three weeks,” Union Agriculture Minister Sharad Pawar told reporters here on Tuesday.

The minister ruled out any plan to import onions though small consignments arrived from Pakistan.

Prime Minister Manmohan Singh asked Sharad Pawar to take action and check the price rise. The Prime Minister's Office, in a letter to the ministry, said Manmohan Singh is deeply concerned about the “extraordinary price rise.”

“The prime minister desires that all necessary steps to effectively deal with the extraordinary price rise of onions and bring the prices down to an affordable level,” a source said.

Wholesale prices at the country's biggest onion-producing centre, Nashik in Maharashtra, crossed Rs 70, giving rise to fears that retails rates in Delhi and elsewhere may touch Rs 100 a kg in the next two days.

Sources said the prime minister wanted expeditious steps and day-to-day monitoring of the impact of the price rise. The prime minister had made references to the wholesale and retail prices in the letter.

Meanwhile, Congress leaders are said to be unhappy with Sharad Pawar’s handling of the price rise.

Despite surging of onion prices for the past month, questions are being asked why the government waited until Monday evening to suspend exports of onion until January 15.

The government had been aware of crop failures in onion-producing states like Karnataka, Haryana, Punjab, Maharashtra and Andhra Pradesh. Therefore, many wonder why the Centre had delayed the ban on onion export.

PMO officials have also understood to have sought a report from the Agriculture and Consumer Affairs Ministry on the reasons for the late reaction and failure of market intelligence portending the price rise.

Under attack

Two months ago, Pawar came under attack from Congress leaders for the rise in the prices of essential commodities. From Rs 35-40, onion prices have shot up to Rs 75-80 in a few days in Delhi and in several other cities.

“We hope that the arrival of fresh produce from Uttar Pradesh, Gujarat and Madhya Pradesh in the next two to three weeks will bring the prices down," Pawar said when asked about the reasons for the price rise.

Onion prices in various agriculture produce market committees in Nashik, the main trading centre for the bulb, have soared to a high of Rs 7,100 per quintal.

This was due to a shortfall in production following untimely rain in the growing areas of Maharashtra in November.

Meanwhile, some traders in North India have started importing onions from neighbouring Pakistan. 

Onion production stood at 12 million tonnes in 2009-10 fiscal, out of which 1.9 million tonnes were exported. In 2010-11, production in kharif season is estimated at five million tonnes.

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