Government tightens its belt to stop prices from rising, starts purchasing five lakh tonnes of onion for buffer stock

In a short amount of time, onion prices frequently start to soar. However, the government does not want this to occur because elections are coming up. To replenish its buffer stock this year, the government has therefore decided to buy five lakh tonnes of onions. Should prices increase, this can be used to restrain them. The government has begun buying onions from farmers in relation to this.

An official in the Consumer Affairs Ministry stated that the central government has begun buying onions from farmers at market prices in order to build up a buffer stock of five lakh tonnes for 2024–2025 in case prices rise. Should onions become more expensive, the buffer will enable the government to step in and control the markets. Especially after the government declared last week that the export ban on onions would be lifted.

It is noteworthy that amidst the ongoing Lok Sabha elections in the country, the government has decided to lift the ban on onion export, but has fixed the minimum export price (MEP) at $ 550 per tonne. Along with this, a 40 percent duty has also been imposed on the export of onion. In August last year, India imposed a 40 percent export duty on onions till December 31, 2023.