21/08/2015 10:17 AM IST | Updated 15/07/2016 8:25 AM IST

Onion Prices Hit 2-Yr High Of Rs 80/kg, Govt Sends Teams To Check Hoarding, Plans Imports

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A farmer arranges onions in a tractor trailer at the Agriculture Produce Market Committee (APMC) wholesale market in Umrana, Maharashtra, India, on Tuesday, Nov. 11, 2014. Consumer prices rose 5.52 percent in October from a year earlier, the slowest pace since the index was created in January 2012, according to government data released Nov. 12, as the government commits to continuing reforms in food markets that will improve supply and keep inflation low. Photographer: Dhiraj Singh/Bloomberg via Getty Images

NEW DELHI — Rising onion prices can bring down governments, and both the Bharatiya Janata Party and the Congress have experienced that the hard way since Delhi gained partial statehood.

Now, Arvind Kejriwal's government is stepping up to control onion prices that have risen to about 80 per kilogram, a two-year high. It was selling at Rs 20 per kilo just a couple of weeks ago.

Onions are staple food across all classes, castes and religions in India. While the country's local cuisines can differ significantly, the onion is a common ingredient in all of them to provide base flavour.

Government teams will monitor stocks of onion, to control hoarding in wholesale markets by traders who profit from higher prices, local administration officials said. Each team consists of a food and civil supplies officer and an Inspector besides an officer from Delhi Agriculture and Marketing Board. The department of food and civil supplies is also keeping a tab on the supply and prices of onions in the national capital, a government spokesperson said.

Arrival of fresh stocks from other states normally eases supply constraints and puts a lid on prices, but this time that might not happen because onion prices have shot up everywhere, traders say.

Rajender Sharma, a committee member of the Azadpur mandi, said inconsistent rainfall had led to low production, which sent prices soaring, and that this trend will continue until September. At Lasalgaon, Nashik, the largest wholesale market for onions in India, prices have touched a two-year high of Rs 4,900 per quintal, a rise of 65 percent in just one month. Retail prices will be higher, except for government's fair price shops which might continue to sell at Rs 30 per kilo.

Prices in Delhi vary with locality. In south Delhi's Saket area, onions are selling at 80 for a kilo. In Shalimar Bagh and Ramesh Nagar, the price is Rs 70 and Rs 60 respectively for the same quantity. On average, the selling price has touched Rs 65 per kilo.

Prices might continue to rise because of dry spells in states such as Maharashtra, Karnataka and Madhya Pradesh, which produce the bulk of India's onions. Prices in Mumbai, Pune and Nagpur might breach the Rs 100 per kilo level, making it unaffordable for most of India's population.

The union government has decided to import 10,000 metric tonnes of onions through a global tender to bring prices down, and is likely to buy from producers in China and Pakistan.

High onion prices have been a deciding factor in elections since 1980, when Indira Gandhi returned to power by turning that into a populist pitch, and assailed the government for failing to control prices. In 1998, the ruling BJP government in Delhi was thrown out of power by an irate electorate that blamed it for rising onion prices. And in 2013, it was the BJP's turn to attack the Congress over rising prices nationwide, and became part of Narendra Modi's election campaign.

(With agency inputs)

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