Posted inEconomics / India

Onion Prices Spiked by 253% in Five Months

Between August and December this year, the average prices (across markets in the country) spiked by a whopping 253%, the highest increase in this decade. While the average retail price is nearly Rs 100 per kilo, onion prices have hit Rs 200 per kilo mark in some big cities in the first week of December, according to reports. According to the agriculture ministry estimates, onion production stood at 23.28 million tonnes in the agricultural year ending June 2019. This figure is very close to that of last year.

Competition Commission of India has twice conducted assessment of onion markets in India—in 2012 and 2015—to realise the core trigger of the recurring onion price problem in the country. In those two studies, one glaring point that emerged was that the collusion among traders in selected markets in Maharashtra and Karnataka may have resulted in high prices of onion. In addition, factors such as significant marketing costs, lack of market infrastructure, control of trade in the hands of few traders, restrictions on entry of new traders, frequent strikes by market functionaries, and can also lead to inflation of onion prices.

However, instead of fixing the problems, the government has relaxed the norms concerning onion imports to immediately import onions from other countries. This move has attracted severe criticism from farmers’ unions.

After the BJP came to power at the Centre, the first hurdle it encountered was a massive spike in onion prices. Between May and July 2014, the prices spiked by 62%. The following year, the prices spiked by 125% between June and September 2015, reaching above Rs 60 per kilo. In 2017, prices spiked twice, by about 106% between July and August, and by 60% between September and November.

In 2019, while the retail onion prices were recorded at Rs 27 per kilo in August, the prices spiked by 253% in December as the onions are sold at an average retail price of Rs 100 per kilo.

— source newsclick.in | 10 Dec 2019

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