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News18 » Videos » News18 Shorts

Onion shortage exists, so do cartels

Dec 22, 2010 10:10 PM IST India India

New Delhi: There has been a seasonal shortfall. However, it alone is not responsible for the spike in onion prices. A look at the market arrivals in the Nashik market clearly point at cartels playing a role. The fact that the agriculture ministry did not act on time to assuage fears of shortage only made things easier for hoarders who are taking advantage of the "shortage sentiment".

Last year this time Onion prices were around Rs 15 per kg. Just six months back, it was Rs 16 per kg and just three months back, it was Rs 24 per kg. Today it is Rs 70 per kg. Is it just unseasonal rains to blame. Agriculture ministry's data on the Nashik market only deepens the mystery. The price pattern is a clear indication of a price cartel in the onion market. Here are the facts that bears this out.

Market arrivals so far this December in Nashik is 39,135 metric tonne (MT), which is more than last year's 36,084 metric tonne.

Last year the maximum price was 2701 per quintal, this year it MORE than double at 6200 Rs.

You cannot even blame it on exports either. Exports last December was 98,921 MT, while exports this December is just 5761 MT

The spike that no one noticed and acted on happened between October and November when prices almost doubled from Rs 1770 to Rs 3825 per tonne. Surprisingly supplies went up almost 20 per cent during this period.

Every one woke up only after the Monday shocker. When wholesale prices shots up from 2500 rupees to 6200 in a single day.

The agriculture ministry admits that is clueless.

National Agricultural Cooperative Marketing Fedration (NAFED) MD, Sanjeev Chopra, " We at NAFED and the ministry have not been able to understand it because market arrivals have been quite all right. The way the modal prices jumped up yesterday was beyond our comprehension "

But if the government is reluctant to either admit or take on possible cartels, it could have preempted possible cartels from exploiting seasonal and localised shortfalls.

Had exports been stopped two months back domestic supply would have been better
The Government could have relaxed the excise duty on onion imports. It could have gone in for short term Onion imports. It could have made onion available at accessible prices across to cool the market. It could have cracked down on hoarders early enough.

Government outlets have started selling onions at 35 - 40 rupees a kilo. But even this price is high. With the agriculture minister resigning himself to high prices for three to four more weeks, the season of suffering is here.

One thing is clear that if there is political will to check rising prices, there are many ways to do that. The sharp fall in the whole price of onions in less than 24 hours after a slew of measures is just the most recent evidence of that. The question is, why did the Government have to wait for the media to highlight the crisis before being forced to act?

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