Gunny bags of onions | Dhiraj Singh/Bloomberg
Gunny bags of onions (representational image) | Photo: Dhiraj Singh | Bloomberg
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New Delhi: India’s states, which had asked the central government to import onions due to the paucity of domestic stocks and rising prices, have now withdrawn either partially or completely from their commitment.

The reason for the states’ withdrawal is the delay in the arrival of imported onions, and the ready availability of cheaper local varieties.

The Ministry of Consumer Affairs estimates that until 3 January, out of the total 6,812 metric tonnes (MT) of imported onions that have arrived in India, states have picked up only 1,015 MT, while the rest lie in warehouses rented by the government at Mumbai’s Jawaharlal Nehru Port (JNPT). The value of the remaining onions is about Rs 27 crore, given that the initial tender rate to import onion from Egypt was $654 per MT.

Addressing a press conference Tuesday, Consumer Affairs Minister Ram Vilas Paswan said that major states that have withdrawn from their demands are Maharashtra, Assam, Haryana, Karnataka and Odisha, which haven’t picked up any onions. They had initially demanded 10,000 MT, 3,000 MT, 3,480 MT, 250 MT and 100 MT, respectively.

With onion prices shooting over Rs 100/kg in November-December, the central government had decided to import 1.2 lakh MT of onions.

Also read: India’s Great Onion Crisis of 2019 is coming to an end

Higher prices a factor

A senior ministry official said the higher prices of the imported onions are certainly proving to be a problem.

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“These states have cited higher prices of the imported onions, which range from Rs 49-58/kg, as they come with an added transportation cost,” a senior ministry official said.

The official added that states have said the imported onions are way too expensive compared to the onion prices in the domestic market, now that late kharif and early rabi onions have already started arriving.

Another ministry official said that local mandis such as Lasalgaon in Maharashtra and Mandsaur in Madhya Pradesh are selling onions for retail prices of Rs 30-40/ kg.

“This makes it difficult for us to sell the imported onions to these states at higher prices, with an additional burden of difference in size and taste of imported onions,” the second official said.

Also read: This is how India can make sure onions are available throughout the year and at good price

Additional incentive

Paswan said at the press conference that there was a delay in the import process, and so far, only 6,812 MT of the 1.2 lakh MT initially sanctioned had reached the country.

The import process has been finalised for 41,950 MT, out of which a tender for 5,000 MT was cancelled last week, bringing the total import order down to 36,950 MT.

“Earlier, demand from the states for the imported onion stood around 33,139 MT, which has been reduced to 14,309 MT after the majority of the states have withdrawn citing pricing issues related to imported onions,” said Avinash K. Srivastava, consumer affairs secretary.

Srivastava added that now the government has offered states the additional incentive of covering the cost of transport, so that they can pick up the onions in accordance with their earlier commitments.

Also read: Can India handle frequent onion crisis without fixing its distortionary farm economics?


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