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Simply Put: What is driving onion prices -Parthasarathi Biswas

-The Indian Express

Government has called for import of 1 lakh tonnes of onion to help control rising prices. What has been causing the increase in prices since May, and how far can the new move be expected to reverse the trend?

Pune:
LAST WEEK, Ram Vilas Paswan, Union Minister for Food and Civil Supplies, directed the state-owned trading corporation MMTC to import 1 lakh tonnes of onions to help ease the spike in retail prices. The decision marks India’s transition from being an onion exporter to an importer.

What has led to the rise in prices?

Prices have risen sharply since May this year, caused by delayed arrival of the new crop and damage to the harvested crop in the main onion-growing states of Maharashtra, Karnataka and Madhya Pradesh.

Due to a decrease in onion acreage in the main onion-growing districts of Maharashtra, arrivals dipped across wholesale markets. Prices at the wholesale market at Lasalgaon, Maharashtra, which were in the range of Rs 500-600 per quintal since the start of January, crossed the Rs 1,000 mark after May. Located in Nashik district, Lasalgaon is the largest onion market in the country and sets the price trends for the crop across the country. Retail prices in most cities have been hovering around Rs 70-80 per kg.

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