The Centre on Monday further reduced the stock holding limit for onion to 2 tonnes from 5 tonnes for retail traders as part of efforts to check hoarding and boost domestic supply of the kitchen staple.
In a statement, the Consumer Affairs Ministry directed the state governments to undertake anti-hoarding operation with immediate effect on retail traders.
Last week, the ministry had reduced the stock holding limit for retailers to 5 tonnes from 10 tonnes while that on wholesalers to 25 tonnes from 50 tonnes as onion prices were ruling high up to Rs 150 per kg.
With retail prices failing to cool down, the ministry has further reduced the stock limits on retailers to 2 tonnes from the existing level of 5 tonnes with immediate effect, the statement added.
Retail onion prices have risen in the past two months due to short supply owing to fall in production of kharif (summer) crop after heavy rains.
As per the ministry's data, maximum retail prices are ruling at Rs 165 per kg on Monday, while modal price was at Rs 100 per kg. In most cities, onions are quoted over Rs 100 per kg in retail markets, pinching hard on consumers' pocket.
The government has taken several measures to improve the supply of onion across the country and check price rise. Besides banning export, the government is boosting the supply through various modes including through sale of buffer stock onions at a subsidised rates and imports.
State-run MMTC has been asked to import about 1 lakh tonnes of onions and the agency has already contracted over 21,000 tonnes and the shipment is expected to arrive mid-January.
Experts are of the view that onion prices will remain firm till the first week of January when the late kharif onions will start hitting the market.