Onion price rise: Food Minister says states must act against hoarders

New Delhi: As onion prices soar, the Centre has said that state governments must check hoarding. "The state governments will have to take action against hoarders and speculators. The government has already controlled exports," Food Minister KV Thomas told CNN-IBN.

He also said that onion prices are will stabilise by the end of September. "The production of new crops is already coming to the market from Karnataka and Andhra Pradesh. By the end of this month prices will stabilise," Thomas said.

This came as onion prices soared again following an acute shortage in supply. Onion prices are a whopping Rs 70 to 80 per kg in the national capital. In Kashmir too, onions are priced at Rs 80 per kg.

Onion prices in the retail market in Navi Mumbai stand at Rs 70 per kg. In Bhopal, onions cost Rs 65 per kg and in Patna Rs 50 per kg.

Reports suggest that a hike in fuel prices and rain in Maharashtra in the last few weeks have hit supply and led to a spike in prices. Reports also suggest that hoarding is pushing onion prices up.

In fact high prices of onion and other kitchen items drove the headline inflation to six-month high of 6.1 per cent in August, limiting options for a rate cut by the new RBI Governor Raghuram Rajan who is scheduled to announce his maiden monetary policy review later this week.

Wholesale price index (WPI) based inflation rose for the third straight month, driven by a whopping 244.62 per cent jump in onion prices on annual basis. WPI inflation was 5.79 per cent in July.