India Launches Direct Onion Sales to Curb Soaring Prices
Government Steps In to Control Onion Prices
With onion prices escalating across India, the Centre has initiated direct sales to consumers at $0,42 per kg, despite the acquisition cost being around $0,34 per kg. This move is part of the government’s efforts to manage food inflation, especially with buffer stocks being larger this year. The government plans to continue selling onions at this price until Diwali, expecting new crop arrivals by then.Union Food and Consumer Affairs Minister Pralhad Joshi, while flagging off mobile vans selling onions in Delhi, stated, “Controlling food inflation is a priority, and direct interventions have helped reduce inflation in recent months.”
Onion Prices and Distribution Channels
The current average retail price ranges from $0,50 per kg in Gujarat to $0,78 per kg in Manipur, with a national average of $0,59 per kg. In Delhi’s NCR, onions are selling between $0,72 to $0,84 per kg, highlighting the growing price disparity across the country. The government’s intervention aims to stabilize prices, though immediate reductions may not be seen.Mobile vans, operated by the National Cooperative Consumer’s Federation of India (NCCF) and National Agricultural Cooperative Marketing Federation of India (Nafed), have started selling onions at key locations. Additionally, onions will be available on e-commerce platforms and at retail outlets like Kendriya Bhandar and Safal.
Next week, sales are set to begin in major cities like Kolkata, Chennai, Hyderabad, and Bengaluru, with plans to cover all high-price areas by mid-September. Agencies are also collaborating with retail chains nationwide to sell onions at $0,42 per kg.
Onion Buffer Stocks and Increased Sowing Offer Optimism
Officials expect onion availability to remain stable, with enhanced supply channels in place. The government has procured 4.7 million tonnes (mt) of onions under the Price Stabilization Fund (PSF) scheme, compared to 3 mt last year. Procurement prices also rose to $0,34 per kg this year, up from $0,20 per kg last year, benefiting farmers during the rabi season.Consumer Affairs Secretary Nidhi Khare added that Kharif onion sowing has increased to 2.9 million hectares, compared to 1.94 million hectares last year. An estimated 3.8 million tonnes of onions remain in storage with farmers and traders.
The government remains committed to ensuring stable prices for consumers while safeguarding farmers' interests through continued monitoring and strategic interventions.