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CCEA may extend ban on onion hoarding by 1 year tomorrow

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New Delhi: The Cabinet Committee on Economic Affairs may consider tomorrow a proposal to extend by one year the ban on hoarding of onions beyond a prescribed limit. The validity of the order, that empowers states to impose stock limits on traders for holding onion and ban hoarding beyond the set limit, expires on July 2.

“The CCEA meeting is scheduled for tomorrow. A proposal related to stock holding limit order on onion is on the agenda for discussion,” according to sources. In the Cabinet note, the Consumer Affairs Ministry has sought extension of the order by another year in view of increase in onion prices due to short supply.

The proposal aims to enable state governments take effective de-hoarding measures under the Essential Commodities Act (ECA), 1955 and help tackle the problem of rising prices and improve the availability of onion for general public. Last year, both onions and potatoes were brought under the purview of the ECA and gave powers to state governments to impose upper limit for holding the stock of these two items by traders and ban hoarding beyond the set ceiling for an year.


Other commodities that come under the ambit of stock holding limits order are pulses, edible oils, oilseeds, rice and paddy. To prevent spike in onion prices in coming days due to supply shortage, the government has already increased the minimum export price of the commodity to USD 425 per tonne and is also planning to import some quantities of onions to boost domestic availability.

Prices in both wholesale and retail markets have started increasing due to sluggish supply of good quality onion in the wake of the crop being damaged in storage in major growing states, including Maharashtra.

High storage losses are likely to reduce availability of onions in the market and put pressure on prices till the arrival of new kharif crop from mid-September. The country’s onion production is estimated to have declined to 189.23 lakh tonnes in the 2014-15 crop year (July -June), as against 194 lakh tonnes in the previous year, as per government data.