The Finance Ministry has announced that a 40 percent duty has been imposed on exports of onions until December 31 of this year, as reported by the government. This duty will take effect immediately.
This action has been taken in response to the ongoing increase in onion prices during this month, with projections indicating a likely continuation of rising prices throughout September.
In a bulletin released on Thursday, the Reserve Bank of India (RBI) noted that the average prices of tomatoes have also seen a further increase in August. However, more recent data suggests a slight reduction in these rates.
The cost of onions and potatoes has also seen a sequential rise, as highlighted in the RBI bulletin.
Starting from August 11, the central government has begun releasing onions from its reserved stockpile, as reported by the news agency ANI.
For the 2023-24 season, the government has decided to maintain a buffer stock of 3 lakh tonnes of onions. In the preceding 2022-23 season, the buffer stock consisted of 2.51 lakh tonnes of onions. This buffer stock is set aside to address any urgent requirements and to stabilize prices in case there is a significant increase during periods of limited supply.
In a meeting held on Thursday, Rohit Kumar Singh, the Secretary of the Food and Public Distribution Department, along with the Managing Directors of the government’s agricultural marketing agencies, namely the National Agricultural Cooperative Marketing Federation of India (NAFED) and the National Cooperative Consumers’ Federation of India Limited (NCCF), finalized the methods for distribution.
A statement from the Food Ministry on Friday revealed that it was decided to release onion stocks strategically in markets across states or regions where retail prices exceed the national average. This approach will also be applied in areas where the rate of price increase in the previous month and year surpasses a certain threshold. The ministry is also exploring options for disposal through e-auctions and retail sales on e-commerce platforms.
Around 65 percent of India’s onion production comes from the Rabi harvest between April and June. This supply caters to consumer demand until the kharif crop is harvested between October and November.
Generally, the procured stocks are released through targeted open market sales, reaching states, Union Territories, and government agencies for distribution through retail outlets during periods of limited supply.