The government will import 12,500 tonne onions from Turkey to bring down the soaring prices that have put the commodity out of reach of the common man. State-run MMTC has contracted the purchase at the behest of the price stabilisation fund management committee of the department of consumer affairs. The imports will hit the market in Mid-January onwards.
The government has so far contracted 42,500 tonne onions to shore up the supply in the domestic market and bring down pieces. Around 12,000 tonne of the commodity will reach India before the year-end to be supplied to different states to meet demand.
Onion is retailing above Rs 130 per kilogram in the retail markets in most parts of the country, while the prices have crossed Rs 150 in some states like Kerala and Delhi. Prices of onion have shot through the roof in the last one month because of the loss of kharif crop due to excess rainfall in Maharashtra and Karnataka, the key producing states. The prices are expected to dip when fresh supplies from the new crop will hit the market in January. The government’s efforts to rein in prices through an export ban and higher imports failed to stop the soaring prices so far.
High Onion prices have fuelled the food inflation, upsetting the fiscal and monetary policies. The Reserve Bank of India paused the repo rate cuts earlier this month mainly due to the high food inflation fuelled by onion prices. The RBI’s decision to hold rates after five consecutive cuts totalling 135 basis points had surprised policy watchers.