Traders sceptical of govt steps as onion, tomato prices hit season's highs

This is largely because the surge in recent weeks is due to the rains in Maharashtra, which could impact kharif harvest if they continue unabated

With the prices of two politically-sensitive commodities, onions and tomatoes, bouncing back to touch the season’s highs, the government has initiated immediate policy interventions to rein in prices. However traders are sceptical of prices coming under control, as the surge in recent weeks is due to the rains in Maharashtra, which could impact the kharif harvest if they continue unabated.

The Department of Consumer Affairs, through an inter-ministerial committee, reviewed the prevailing prices and availability of onions and tomatoes on Friday, expressing satisfaction over the increase in supply at the wholesale mandis. The committee hoped the two commoditoes would start becoming affordable.

The meeting was attended in Delhi by representatives of the Ministry of Agriculture and Farmers’ Welfare, Ministry of Commerce, Ministry of Food Processing, Nafed, Mother Dairy, Kendriya Bhandar, Representative of the Delhi government, representative from APMC Azadpur and senior officials of the Department of Consumer Affairs.

“During the meeting, it was informed that there has been some disruption in supplies due to Diwali holidays and rains in some of the growing areas affecting harvesting. This has led to a rise in prices, but the increase in arrivals which has begun would have a direct impact on arresting and then reducing the prices in the wholesale and retail market,” said a participant.

Participants deliberated the reasons for the sudden increase in prices over the last few days. In fact, onion (model) touched Rs 43.50 a kg in the benchmark Lasalgaon mandi, Asia’s largest spot onion selling platform. This is marginally lower than the season’s record of Rs 45 a kg achieved on September 29. Despite getting disrupted by unseasonal rainfall, onion arrivals have improved to 160 tonnes on Friday in Lasalgaon from 7.15 tonnes on October 30.

“Onion supply was disrupted because of rainfall across major growing regions. Normally, early variety (red onion) supply begins by this time. But farmers haven't started harvesting red onion yet. Since very small quantities of onion are left over from the last season, supply was badly hit. If rain continues, prices would rise further,” said Jaydutta Holkar, Chairman, APMC Lasalgaon.

Similarly, tomato (model) in the Delhi mandi surged to trade at over Rs 28 a kg on Friday, lower than Rs 36 a kg reached about a month ago.

Meanwhile, a senior official from the Ministry of Agriculture informed the committee that harvesting of kharif onion is underway in Karnataka and Andhra Pradesh and has begun in Maharashtra, Madhya Pradesh and Rajasthan. Late Kharif sowing has been completed in Maharashtra, Madhya Pradesh and Gujarat. As per reports received so far, area coverage under kharif is expected to be more than last year, said the official from the Ministry of Agriculture.

In case of tomatoes it was informed that harvesting is underway in Andhra Pradesh, Tamil Nadu, Maharashtra and Karnataka. While arrivals of tomato has started improving, it has been somewhat affected due to heavy rains in Maharashtra and Karnataka. Arrivals are expected to improve during mid-November with harvesting taking place in Rajasthan, Madhya Pradesh, Haryana and Uttar Pradesh.

The government, however, has decided Mother Dairy will augment their supplies of onions by sourcing quality bulbs from the open market for retailing in Delhi market. APMC Delhi will facilitate Mother Dairy in its operations. The government is also working on to facilitate movement of onions and tomatoes.

Apart from that, around 80 containers of onions have been imported from Egypt and Netherlands which are set to hit mandis shortly.