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Goverment imposes stock limit on onion traders to prevent hoarding

In an apparent effort to control the rising prices of onions, the central government on Sunday imposed a stock limit on onion traders to facilitate the release of onion stocks in the market and prevention of hoarding by traders.

Goverment imposes stock limit on onion traders to prevent hoarding

New Delhi: In an apparent effort to control the rising prices of onions, the central government on Sunday imposed a stock limit on onion traders to facilitate the release of onion stocks in the market and prevention of hoarding by traders.

For retail traders, the stock limit has been set at 100 quintals and for wholesale traders, the stock limit has been set at 500 quintals, which has been imposed with immediate effect across the country from Sunday. Any trader found violating the imposition, will be fined heavily by the government, the Union Ministry of Commerce and Industry said.

This comes as when there is a surge in the price of any vegetable, the respective traders tend to start stocking the said vegetable, which leads to the increased price of the vegetable as its demand in the market increases.

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Earlier on Sunday, the Union Ministry of Commerce and Industry banned the export of onions with "immediate effect" until further orders. "Export policy of onion for the item description at Serial Number 51 & 52 of Chapter 7 of Schedule 2 of ITC (HS) classification of Export & Import Items is amended from free to prohibited till further orders," the Ministry of Commerce & Industry said in a statement.

The onion prices have surged over 300% in the last few weeks due to a shortfall in supply following heavy rainfall in Maharashtra and Karnataka - the two main onion-producing states in the country. Last week, onion was selling for around Rs 70-80 per kg in the retail market in the national capital Delhi and several other parts of the country. The Consumer Affairs Ministry data showed that onion price was hovering at around Rs 60/kg in cities like Delhi, Mumbai and Lucknow last week. 

Delhi Chief Minister Arvind Kejriwal had on Friday announced that his government will provide onions at Rs 23.90/kg in the national capital.