Government agencies to procure onions to curb speculation

PUNE: Central agencies have started buying onions directly to create a buffer stock of at least 12,500 tonne for the next four-five months to curb speculation in the politically-sensitive commodity , especially in view of the unseasonal rains that led to the deterioration in quality of the produce and sparked apprehension of an uptick in prices beginning June.

“We have been mandated to make a buffer stock of 5,000 tonne of onion by the ministry of agriculture and the Delhi government separately . We will bring it for release in Delhi-NCR in the next four to five months as the need be,“ said Pravesh Sharma, MD of Small Farmers' Agri-Business Consortium (SFAC).

The National Agricultural Cooperative Marketing Federation (Nafed) too has started procurement of onions in Lasalgaon in Maharashtra.

The move comes as the government is keeping a hawk's eye on other commodities as well, including pulses and oil seeds. SFAC also made a small reserve of 500 tonne of potato.

“We have just reserved this quantity of potatoes in order to learn dynamics of its value chain,“ said Sharma. The Price Stabilisation Fund of ` . 500 crore created last year will be used for financing the onion procurement. The Centre has allocated ` . 5 crore each to Nafed and SFAC. “Nafed has already started onion procurement at Lasalgaon. It has a storage capacity of 2,500 tonne in Nashik district,“ said Nanasaheb Patil, director, Nafed and chairman of Lasalgaon Agricultural Produce Market Committee.

Nafed intends to buy 10,000 tonne of onion, according to people familiar with the matter.

“We have purchased about 300 tonne of onions so far,“ said Sriram Gadhve, promoter, Maharashtra State Consortium of Farmers' Producer Companies.

Punjab is also trying to create a buffer stock of onions, according to some people, although this could not be confirmed with the state government.

Traders said just about 20% of the total produce of onion is of best quality and it is being purchased at `. 17-18 per kg for storage.Nafed is paying about ` . 15 per kg for the onion that is being bought for buffer storage.

Onion prices are expected to go up because majority of the produce this year is not suitable for storage for long. Traders are said to be betting big on the commodity and stocking it heavily in the storage structures owned by farmers.