Govt plans to sell imported onion at Rs 22-23/kg to avoid rotting at port

The Centre may soon offload imported onions at a highly subsidised rate of Rs 22-23/kg, down around 60 per cent from the current offered rate, as it apprehends rotting of the perishable kitchen item at ports, sources said on Thursday.

The central government is currently offering imported onions to state governments at an average landed cost of Rs 58/kg for further distribution in the retail market. It is also bearing the transportation cost.

To check spiralling onion prices, the government had in November 2019 decided to import 1.2 lakh tonnes of onion through state-run MMTC. Since then, MMTC has been able to purchase 14,000 tonnes of onion from the overseas market.

According to sources, a large quantity of imported onion is still lying at ports, especially in Maharashtra, as many states did not show interest to lift the commodity at high rates at a time when retail prices started cooling down on arrival of fresh crop.

Many states withdrew their orders for lifting the imported onions as they could not retail it further owing to difference in taste compared with homegrown ones, the sources said.

With few takers for imported onions, MMTC -- which had placed orders for import of 40,000 tonnes --- finally purchased only 14,000 tonnes and a large quantity of which is still lying at ports, the sources added.

Agencies like Nafed, Mother Dairy as well as interested state governments can lift the imported onions at Rs 22-23/kg for distribution in mandis.

The government was forced to import onion in a bid to contain prices, which have cooled down now to Rs 60/kg from the peak of Rs 160/kg in last few months.

In its first estimate, the government has pegged the country's overall onion production to rise by seven per cent to 24.45 million tonnes in the current 2019-20 crop year, which may bring relief to consumers from high prices seen in the last few months.

Onion crops have been grown in 12.93 lakh hectare in the 2019-20 crop year (July-June), slightly higher than 12.20 lakh hectare achieved during the previous year.

Onion is grown during both kharif (summer) and rabi (winter) season. The government had recently said there was around 22 per cent damage in kharif onion crop due to late monsoon rains and later excess rainfall, which led to supply constraint and sharp rise in prices.