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Government tightens monitoring of rising onion prices, will release buffer stock into the market.
Amid rising onion prices in various parts of the country, the central government has decided to release its buffer stock of onions into the market. The government aims to increase the availability of onion in areas where its price is much higher than the national average. On Saturday, the average price of onion increased to around Rs 42 per kg.
This price is about 45 percent higher than the same period last year, while compared to last month, it has registered an increase of about 19 percent. This sudden rise in onion prices is directly affecting the household budget of common consumers.
To control prices and maintain adequate supply in the market, the government is going to run special ‘Kanda Express’ trains from Monday. Through these trains, onions will be transported from Nashik to those cities where prices are higher than the national average.
Onions will be transported from Nashik to Delhi, Chennai, Kochi, and Guwahati.
Under the government’s plan, onion shipments from Nashik will be sent to Delhi, Chennai, Kochi, and Guwahati via special trains. These cities have been chosen because onion prices here remain above the national average.
Nashik is among the major onion producing areas of the country. From there, large quantities of onions are sent to different parts of the country. The government now wants to use this supply network to balance prices.
Through ‘Kanda Express’, an attempt will be made to transport large quantities of onions to other states in a relatively short time. This is expected to increase availability in markets where prices are currently under pressure.
The average price of onions reached ₹42 per kg.
On Saturday, the average price of onions was recorded at around ₹42 per kg. This is about 45 percent more than last year. At the same time, the price has increased by about 19 percent within just one month.
Being an essential item used in the kitchen every day, the increase in the price of onion affects a large number of families. Due to increase in prices, consumers are having to spend more money in the retail market than before.
The government is trying to create a balance between demand and supply by making additional stock available in the market. This may help in controlling the rise in prices.
Buffer stock will increase market supply
The central government maintains a buffer stock of onions, which can be used to increase market supply if needed. In the current situation, preparations are being made to send this stock to different areas.
Releasing the buffer stock into the market may increase the availability of onion in areas where prices are rising due to low supply. The government aims to limit sudden price increases.
This step is being considered especially important for those cities where the price of onion is above the national average. As its supply increases in the coming days, its impact on retail prices can be seen.
Kanda Express will support the supply chain.
Timely transportation of perishable agricultural produce like onions from one market to another is crucial. The government is trying to transport large quantities of onions to major cities through special train services.
Sending large consignments at once via rail transport can be more cost effective than road transport in many cases. This can also help maintain supply in long-distance markets.
The plan to send onions to different regions like Chennai, Kochi and Guwahati apart from Delhi is also aimed at reducing the difference in regional prices.
The Centre’s Strategy to Control Inflation
The rise in onion prices is a matter of concern for the government, as it could impact the budgets of ordinary families as well as food inflation figures. In such a situation, the use of buffer stock is part of the strategy to control prices.
In the past too, the government has been increasing additional supply in the market through buffer stock in case of sudden increase in the prices of essential agricultural commodities. The same system is being used in the present case also.
Now it remains to be seen how much impact the regular supply of onion from Nashik will have on retail prices in Delhi and other targeted cities.
The government is monitoring onion prices; special train services will begin on Monday.
The central government has decided to intervene in the market after the average price of onion reached ₹42 per kg. The sharp rise in prices compared to last year and last month has prompted the government to increase the use of buffer stock.
From Monday, onions will be sent from Nashik to Delhi, Chennai, Kochi and Guwahati through ‘Kanda Express’. Since prices in these cities are higher than the national average, they have been given priority for supply.
The government is trying to increase the availability of additional onions by bringing them to the market and control the rise in prices. Now everyone will be keeping an eye on how much change occurs in onion prices after the supply increases in the market in the coming days.
