Centre mulls onion MEP hike; asks states to check speculation

NEW DELHI: The Centre has directed states to take action against traders who create an artificial shortage of onions and is considering curbs on overseas sales by increasing the minimum export price to USD 900 a tonne.

"All states and Union Territories have been asked to take action against traders/speculators creating artificial price increase of onions, taking advantage of seasonal shortage," a senior Consumer Affairs Ministry official told PTI.

Wholesale and retail onion prices in most parts of the country have increased sharply since July. In the national capital, retail onion prices are ruling as high as Rs 80/kg compared with Rs 22/kg a year earlier.

Maharashtra, where the maximum quantity of onions is stored, has been asked to ensure steady supplies of the staple vegetable in consuming states, the official said.

The state government has been directed to intimate the Centre if there are any bottlenecks in the supply chain as they can cause prices to rise, the official added.

The Centre also explored other ways to improve supplies and control the price rise. A committee of officials from the commerce, agriculture, consumer affairs and finance ministries held a meeting to discuss onion prices.

The committee considered a proposal of the National Agricultural Cooperative Marketing Federation of India Ltd ( Nafed) to increase the minimum export price of onions to USD 900 a tonne from the current level of USD 650 a tonne to restrict outbound shipments, sources said.

The final call on export prices will be taken by the Commerce Minister, the sources said. Some committee members favoured an increase in the minimum export price even if it would have no impact on the quantity of overseas shipments.