Onion crisis worsened by hoarding?

Bangalore: Onions are now Rs 60 a kilogram across India. While production has been affected because of drought conditions in Maharashtra, the largest onion producing state in the country, experts say hoarding of onions by many traders has caused an artificial crisis.

This can prove very costly in an election year.

The main Opposition Bharatiya Janata Party (BJP), which held a protest march in Delhi today against the rising prices, had witnessed a similar scenario in 1998, when commodity prices touched their peak and was among the causes for the defeat of the party.

Good quality onions, especially the ones exported from Maharashtra, cost a minimum of Rs 60 per kilogram in big cities.

In Karnataka, the second largest producer of onions in the country, traders are procuring larger stocks of onions but of very little size.

Onion merchants, however, say that the traders hoard stocks.

"The traders hoard the onions. We merchants don't do anything of the sort," Ajith Babu, a merchant, said.

The sight is familiar from south to north. In Ambala on the Haryana-Punjab border, a raid was held to check hoarders and stocks.

"There are lots of laws which say you can crack down on hoarding, speculation or monopolization of the trade but the government doesn't want to do it," Devender Sharma, an agricultural expert, said.

On June 15, the National Agricultural Cooperative Marketing Federation of India (NAFED) wrote a letter to most states offering to store onions. It said it would act as a reserve and would dissuade black-marketing. The response, however, was lukewarm.

Today the government asked NAFED to import onions from Pakistan and Iran, according to an official statement. It also took steps to curb the exports by fixing the minimum export price (MEP) at USD 650 per tonne of onions.

The prices are likely to dip in about 10 days' time, when it is time for sowing fresh crop. Until then, the politically sensitive commodity will remain a luxury in Indian kitchens.