90% purchase completed to make 2 lakh tonnes buffer stock of onions

New Delhi: The central government has procured more than 90 per cent of the onion to make a buffer stock of 8 lakh tonnes under the Price Stabilization Fund for the season 2021-2, a government official said.

The official said the government, through its nodal agency NAFED (National Agricultural Cooperative Marketing Federation of India), has procured 1.50 lakh tonnes of onions for buffer stock.

The government's nodal agency NAFED started buying in the third week of April.

In key procurement states like Maharashtra, Madhya Pradesh, Gujarat, Andhra Pradesh and Karnataka, earlier purchases were a bit slow due to mini lockdowns, while Maharashtra, the leading producer, saw maximum purchases, he said.

"The government has procured onions harvested in the Ravi season 2020-21 (July-June)," the official said.

Under the Price Stabilization Fund, government agencies procure onions and foodgrains from farmers at market prices.

The official said the government has decided to increase the size of its buffer stock this year after it faced difficulties in reducing onion prices in September-October. The agency supplies onions to states and retail markets from its buffer stock and helps keep domestic prices from rising.

Onions are currently sold at Rs 40-50 per kg in the main spot markets, which reach around Rs 5 per kg in September-October every year. Traders said prices in some markets had touched Rs 100 per kg even in November.

Heavy rains in August-September damaged kharif crop of onions in major producing states like Maharashtra and Karnataka, pushing up prices. According to the Agriculture Ministry, onion production is expected to increase by 0.5% to 6.5 lakh tonnes in 2020-21 (July-June).