In 2018 Prime Minister Narendra Modi announced that his government will give priority and monitor the prices, production, and storage of tomatoes, potatoes, and onions (TOP). Since then the three essentials of the masses have seen a roller coaster ride as far as prices are concerned.
The current prices of onion in the market are touching Rs. 80/kg, in almost all the major cities. In Mumbai, the prices went as high as Rs. 100/kg. The current rise in prices owes its genesis to the untimely rain in Karnataka and Maharashtra. This resulted in a massive loss of the Kharif crop. Heavy rains also massively hit onion crops grown in parts of Madhya Pradesh, Gujarat, and Maharashtra. India’s on an average onion consumption stands at 3000 truckloads every day. However, the massive damage has reduced supply to 15000 truckloads in the market.
But heavy rains cannot be blamed as the only reason for price rise, a month ago GOI excluded onions from the essential commodity list which means no stock limit. As expected, this move was not able to sustain itself and the government had to intervene again and reintroduce stock limits after the concern was raised that the traders are involving in hoarding and creating artificial price rise. Along with these moves, the Government also banned the export of onion, and import norms were relaxed for imports from Iran and Turkey.
These moves by the government although were effective but still were not able to control the prices in a significant manner. The import took care of the needs of the hospitality industry but was unable to manage the household consumption. It seems that the price correction is unlikely to yield any result till the new crop enters the market after November.