Onion prices climb further; Govt sees prices easing in 2-3 weeks

The prices of onions have soared to Rs 70-80 per kg in retail markets from Rs 35-40 just a few days ago due to shortage on account of damage to crops in Maharashtra, Gujarat and some southern states because of rains that has triggered hoarding.

"Onion prices will remain high for the next 2-3 weeks and the situation is likely to improve only after that," Food and Agriculture Minister Sharad Pawar told reporters.

Notwithstanding the high prices, he said the government does not have any plan to import onions, even as small consignments of 450 tonnes have arrived from Pakistan in the Punjab border since yesterday at Rs 18-20 per kg. This may ease the situation to some extent in northern parts of India, traders feel.

A worried Prime Minister Manmohan Singh stepped into the picture asking Agriculture and Consumer Affairs ministries to take effective steps to bring down the prices to affordable levels.

"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," an official source said quoting from letters written by the Prime Minister's Office to the ministries concerned.

Singh wanted that steps should be taken expeditiously and the impact monitored on a day-to-day basis, sources said, adding that the PM's letter also made references to the wholesale and retail prices.

While onion was said to be selling at Rs 80-85 per kg in Chennai, it was Rs 70-80 in Delhi, Rs 55-60 in Mumbai and Rs 60-70 in Kolkata.

Commerce Minister Anand Sharma said this is a case of speculative hoarding, after yesterday's announcement prices have fallen. He added that more steps are being contemplated.

Delhi Chief Minister Sheila Dikshit warned of raids against hoarders.
Explaining the reasons behind the spurt in onion prices, Pawar said: "Because of heavy rains in Nashik area substantial quantity of onion has been damaged. Our expectation is that with the arrival from Uttar Pradesh, Gujarat and Madhya Pradesh in the next 2-3 weeks, prices will come down".

Asked whether the government will import onion to boost domestic supply, Pawar said: "As of today there is no proposal to import".

Pawar highlighted the steps taken by the government to control prices such as suspension of exports till January 15 and more than doubling minimum export price of onion to USD 1,200 per tonne from USD 525 per tonne.

"Ban on onion exports should help reduce the prices," he said.
Wholesale price in major markets of Nashik declined by up to 33 per cent mainly due to ban on shipments, but there was no immediate impact on the retail prices.