India takes steps to stabilize onion prices amid concerns of rising costs

Export duty imposed to control prices

In a move to address the surging onion prices in the domestic market, the Indian government has taken steps to curb onion exports by imposing a 40 percent duty until December 31. This measure aims to stabilize the onion market and ensure affordability for consumers. The decision comes as concerns grow over potential price hikes in September, driven by supply and demand dynamics.

The Indian government's decision to levy a 40 percent export duty on onions is a direct response to the escalating onion prices in the country. The imposition of this duty seeks to limit the export of onions, thereby maintaining a balance between domestic supply and demand. This move also signifies the government's commitment to ensuring essential commodities remain accessible to the public.

Onion prices forecasted to rise

Reports suggest that onion prices are expected to rise in the coming months, prompting the government to take preemptive action. By imposing export duties, India aims to preemptively manage the situation and prevent further price hikes, which could impact consumers' budgets and food security.

To tackle the price surge, the government is releasing onions from its buffer stock in specific regions. This measure is aimed at stabilizing prices until the arrival of the new onion crop in October. The government is exploring various distribution channels, including e-auctions, e-commerce platforms, and partnerships with state authorities. Discounts are also being offered through retail outlets operated by consumer cooperatives and corporations.

The government's proactive stance is reflected in its efforts to expand the onion buffer stock. The stockpile of onions within the Price Stabilization Fund (PSF) has increased from one lakh tonnes in 2020-21 to three lakh tonnes in 2023-24. This expansion ensures the availability of onions at affordable prices and helps maintain price stability during periods of low supply.

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Initiatives for longevity and affordability

Recognizing the importance of extending onion shelf life, the government has initiated a pilot project for onion irradiation in collaboration with the Bhabha Atomic Research Centre (BARC). This endeavor aims to enhance the longevity of onions and contribute to their availability throughout the year.

The buffer stock system has played a pivotal role in ensuring a consistent onion supply to consumers at reasonable prices. By procuring onions during the Rabi season and releasing them during lean periods, the government has successfully curbed extreme price fluctuations. This strategic approach fosters stability in onion markets and reinforces the government's commitment to citizens' welfare.

With India relying heavily on the Rabi season for its onion supplies, it's crucial to ensure a steady availability of this essential vegetable. The government's efforts to strike a balance between production, distribution, and pricing underscore its dedication to meeting consumer demands and maintaining stability in the onion market.The implementation of export duties and the broader strategies employed by the government reflect a concerted effort to safeguard consumers' interests and stabilize onion prices, contributing to overall food security and affordability.

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