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Onion prices: Traders, farmers make profits at the cost of the consumer

Sep 23, 2013 08:42 AM IST India India

Nashik: While suppliers blamed a shortfall in production for rising onion prices, a CNN-IBN investigation has now exposed the reason behind the unprecedented crisis. While traders made huge profits by hoarding onions, farmers too added to consumer woes by holding back the produce.

Th onion was never so elusive. It crossed the Rs 80 per kg mark in several parts of the country, burning a big hole in the common man's pocket. A CNN-IBN investigation now peels off the layers of blame game to get to the root of the onion crisis. At the country's epicentre of onion production near Nashik in Maharashtra, CNN-IBN caught on camera a wholesale trader who has stocked onions at his warehouse but is blaming the farmers for hoarding.

"The markets runs according to farmers. If 200 trolleys are supposed to come in, the farmers think they need only send 50 trolleys, which will drive the price up," the trader said.

He also confessed that traders did stock up. "About 1 year and 6 months ago, every trader had 5 to 10 truck-loads of onions," he said.

The Lasalgaon onion wholesale market is one of Asia's largest wholesale onion market near Nashik in Maharashtra. CNN-IBN went there to talk to farmers to try and understand as to what was the reason behind the current onion crisis.

"One of our agents had a stock of 7,000 quintals selling at Rs 7 to 8 per kilo. He stored the stock and when the price went up, he started selling the stock at Rs 40 rupees per kg," a farmer said.

Till this day, the traders have a lot of stock that they don't enter into the market, about 4,000 to 5,000 quintals each. They're waiting for the market price to go up, then they'll release the stock.

In fact, not just traders, a farmer candidly reveals that even he made a killing by stocking onion. "Farmers have made a lot of money as well, I myself have made Rs 25 lakh," a farmer said.

With both the farmers and the traders exploiting the fall in production due to the poor rainfall last year, it is the consumers that have paid the price, quite literally. A farmer said, "These onions bring tears to our eyes."