Govt to check onion prices with imports

NEW DELHI: Apprehending further increase in onion prices from next month due to short supply, the government appears set to import the key kitchen ingredient to cool down domestic prices. While a formal decision is expected next week, sources said public sector companies have been asked to look at the possibility of shipping onion from Pakistan, China, Malaysia and Iran. Officials said there are indications of wholesale prices in major mandis going beyond Rs 30 a kg, which may result in a further spike in the retail markets. In fact, there are indications of significant reduction in daily arrival in two major onion mandis - Lasalgaon and Pimpalgaon - this month. The decrease is sharp in Pimpalgaon. Even if domestic supplies are not impacted, the import back up is expected to check unnecessary profiteering, explained officials. An inter-ministerial meeting is scheduled next week where the need to begin imports will be discussed. An official said once a decision to ship onions into the country is taken, the source of imports will be finalized. The PSUs through which imports may take place have been asked to prepare for the possibility. Deficient monsoon rains has raised fears of short supply in the market, pushing up prices. Data available with the consumer affairs department shows that the wholesale price of onion, for instance, in Delhi has increased from Rs 12.50 a kg to Rs 19.63 a kg now — an increase of 57%. Between June 10 and July, the wholesale price has gone up by around 90%, while retail rates are up 62%. The government is keen to avoid a repeat of prices crossing the Rs 70-80 a kg level as the BJP had come to power using inflation a key poll plank. Officials said the government has already initiated measures to curb exports by setting a minimum export price of $500 a tonne and increase in supplies. Although some exports to Bangladesh and Dubai are still under way, the volumes are small and there is no need to raise the MEP currently, said officials. In addition, state governments have initiated administrative action to check hoarding. "Now we need to augment availability since we are expecting some problem later. So commerce ministry has suggested that it may be worthwhile to import now to have supplies ready in time," said an official, who did not wish to be identified. TOI