India Hikes Onion Buffer To 5 Lakh Tonnes To Check Prices

The Union government has raised the quantum of onion buffer to five lakh tonnes this year after achieving the initial procurement target of three lakh tonnes.

The Department of Consumer Affairs has directed the National Cooperative Consumers' Federation and the National Agricultural Cooperative Marketing Federation of India to procure one-lakh-tonne each to achieve the additional procurement target, according to an official release on Sunday.

It will begin selling onions from its buffer stocks at a subsidised rate of Rs 25 per kg through retail outlets and mobile vans of the NCCF from Monday, the Ministry of Consumer Affairs, Food & Public Distribution said.

Disposal of onions from the buffer has commenced, targeting major markets in states and Union territories where retail prices are above the all-India average or are significantly higher than the previous month.

This comes a day after the government imposed 40% tax on export of onions to ensure domestic supply amid threat of price rise.

Onion prices have started inching up amid reports of lag in onion coverage in the ongoing kharif season. According to the wholesale price index data for July, onion inflation spiralled to 7.13%, against -4.31% in June.

The annual retail or consumer price inflation touched a 15-month high of 7.44% in July against 4.87% in June amid a sharp spike in food prices.

As of date, about 1,400 tonnes of onions from the buffer have been dispatched to the targeted markets and are being continuously released to augment the availability.

The onion buffer hike, targeted release of stocks and imposition of export "will benefit the farmers and consumers by assuring remunerative prices to the onion farmers while ensuring continuous availability to the consumers at affordable prices," the release said.