Wholesale onion prices crash 50% in auction after I-T raids

Wholesale onion rates at the Lasalgaon market went up for auction on Monday and prices crashed by over 50 percent. The auction started five days after Income Tax raids on seven biggest traders last week.

According to traders at the Agriculture Produce Market Committees at Lasalgaon, Pimpalgaon and Vashi, onions were sold at Rs 800-Rs 1,200 per quintal as opposed to Rs 2,400-to-Rs 2600 per quintal ten days ago.

"Total quantity of onion at Vashi APMC was 17,920 quintal on Monday. The rates were down by more than 50 percent on Monday. The old stocked onion will be disposed of by end of this month. From mid-October, there will be fresh stock," said Ashok Walunje, an onion trader from Vashi.

Traders had imported 300 containers from Egypt in a bid to get good rates. "Each container carried 12 tonnes of onion and cost traders Rs 16 per kg. Wholesalers were expecting to get margins of Rs 8 per kg at least, but the raids killed their hopes and they have been forced to sell at lower rates," said a trader, requesting anonymity.

"While rates crashing by 50 percent is good for a common man, it's not really good for the farmer. We are not opposed to the government taking action against unscrupulous traders, but the farmers should not be made to suffer," said Nanasaheb Patil, chairman, APMC, Lasalgaon.

"Government has also listed the onion in the essential commodities list. If the government is really serious about controlling spiralling prices, it should offer minimum support price. Looking at the current input cost, it should have a MSP of Rs 2,000 per quintal," Patil added.