Onion Prices Soar: Government to Increase Buffer Stock Releases to Stabilize Market

The central government has taken a big step to curb the rising onion prices. It has increased the sale of onion from the buffer stock to the wholesale market. It hopes that releasing more quantity of onion from the buffer stock will increase its availability in the market. This will bring down the retail price.

Also, the government is working on a plan to sell onion at Rs 35 per kg across the country. However, onion has become very expensive in the market right now. For the last few weeks, onion has been sold at Rs 60 per kg. Whereas, till the beginning of August, the price of onion was Rs 35 to Rs 40 per kg. The sudden increase in onion prices has spoiled the kitchen budget of the common man.

What is buffer stock?

Buffer stock refers to a reserve supply of goods or commodities held by the government or a designated authority. It is created to stabilize prices and manage fluctuations in supply and demand in the market. Buffer stock acts as a cushion against market uncertainties and aims to ensure the continued availability of essential commodities.

By regulating commodity quantities, buffer stocks help maintain stable prices and prevent excessive fluctuations that can negatively affect both consumers and producers. The main purpose of buffer stocks is to promote economic stability and mitigate the adverse effects of market imbalances.

What is the government's plan to control the onion price?

Consumer Affairs Secretary Nidhi Khare said on Monday that the Center has started releasing a large quantity of onion from its buffer stock in the wholesale markets of Delhi and other major cities. It will also sell subsidized retail onion across the country. Detailed plans are being made for this. Talking to reporters, Khare said that we were expecting a jump in prices after the export duty was removed. However, we currently have a buffer stock of 4.7 lakh tonnes of onion. Also, this time the area of Kharif onion has increased. In such a situation, we hope that the rising prices of onion will be curbed.

Nidhi Khare said that the government is planning to increase the retail sale of onion at a subsidized rate of Rs 35 per kg across the country, focusing on those cities where prices are higher than the national average. According to official data, the retail price of onion in Delhi on September 22 was Rs 55 per kg, up from Rs 38 per kg a year ago. Prices in Mumbai and Chennai have reached Rs 58 and Rs 60 per kg respectively.

From September 5, the government has been selling onions at the rate of Rs 35 per kg in Delhi and other state capitals through mobile vans and NCCF and NAFED outlets. Khare said about the upcoming Kharif onion crop that the area has increased significantly compared to last year. He said that the arrivals will start next month, and we do not see any production related concerns. The secretary also talked about the prices of other commodities. Regarding edible oils, he acknowledged the increase in prices after the recent increase in import duty. He said that this step has been taken to protect domestic farmers.