Hyderabad's biggest onion market in Malakpet was shut down on Tuesday as the wholesale traders have stopped buying the produce owing to the cash crunch.
The move is likely to disrupt the onion supply in the city and surrounding areas and onion prices may also shoot up in the coming days.
Hyderabad Onion Merchants Association said that it has decided to stop onion trading for five days starting from Tuesday till November 19 as its members did not have adequate cash in hand to handle the transactions.
According to the association president Ananth Reddy, the market receives roughly around 70-100 truck loads of onion a day from other states including Andhra Pradesh, Karnataka and Maharashtra.
Close to half of this quantity is being consumed locally while the rest of the onions are transported to Ichapuram (AP) and Kolkata and from there they are exported to neighboring countries such as Nepal and Bangladesh.
Reddy said: "Though big farmers and few traders accept payment through RTGS facility, over 50 per cent of our transactions are cash based. Small farmers, truck drivers, hamali and tillers do not accept any other form of payment except cash. Banks should allow the current account holders to withdraw at least Rs 2 lakh cash a day for the rotation of our business."
K Mallesh Yadav, president of Hyderabad Tractors and Tillers' Association, said that there were about 500 tillers engaged in supply of onions to nine retail markets in Hyderabad and Secunderabad areas from the Malakpet market. All of them will have no work due to the temporary shutdown of the market, according to him.
In the light of the wholesale traders' decision, minister T Harish Rao, who also holds marketing portfolio, has directed the department officials to increase the direct procurement from the farmers and make the stock available in the retail markets in the city.
The Malakpet Market Committee has purchased Rs 15 crore worth of onions directly from farmers in the past 10-15 days and it will be selling the same in the local market from Wednesday.
