Government’s Measure to Tackle Rising Onion Prices
On Saturday, the Indian government imposed a 40% duty on onion exports in a bid to combat increasing prices and enhance domestic supplies. The Finance Ministry issued a notification announcing the export duty’s immediate implementation until December 31, 2023. This move comes amid concerns of a potential rise in onion prices in September.
Release of Buffer Stock
Previously, the government had disclosed its plan to release 3 lakh tonnes of onions from its buffer stock to bolster onion availability. In the fiscal year 2022-23, the government had maintained 2.51 lakh tonnes of onions in its buffer stock. Buffer stocks are established within the Price Stabilization Fund (PSF) to address emergencies arising from significant price increases during periods of low supply.
Onions procured for the buffer stock were sourced from the recently concluded rabi season. Typically, buffer stocks are distributed to states, union territories, and government agencies for targeted open market sales and retail distribution during periods of low supply. Currently, kharif onion sowing is underway, and its arrival is expected to begin in October.
Exploring Advanced Storage Technology
The Ministry of Consumer Affairs, in collaboration with the Department of Atomic Energy and the Bhabha Atomic Research Center, is exploring advanced storage technology for onions. In the fiscal year 2022-23, the government procured a record 2.51 lakh metric tonnes of onions from the Rabi-2022 crop under the PSF. These onions were subsequently released to major consumption centers between September 2022 and January 2023. Rabi onion harvesting accounted for 65% of production during April-June.