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Home Food Information News Flash Manipulating Onion Prices

Manipulating Onion Prices

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Mumbai: The chairman of Indias cooperative stores network on Friday exposed the artful ways in which unscrupulous middlemen at the APMC in Lasalgaon,Nashik,are rigging prices of onion.In his interview with TOI,he confirmed what several experts have said off the record.Right from quoting high prices for cheap purchases to mixing different qualities of onion,the traders at APMC employ every trick in the book to milk their monopoly over the market.
The chairman of the National Co-operative Consumers Federation of India (NCCF),a body that worked under Sharad Pawar until Wednesdays cabinet reshuffle,was in Mumbai on Friday.Virendra Singh had been visiting Lasalgaon,the major producing market near Nashik,to assess the situation over onion prices.What Singh saw left him speechless.A well-oiled cartel of APMC traders,who are the only ones farmers may sell to,rigs prices in several ways.They mix graded stacks of onion and sell the entire stock at inordinately high prices.For instance,the Kolkata market prefers small onions while north India likes the large-sized ones.Farmers who bring truckloads of each kind sell their produce for Rs 1,000-1,200 per quintal (100 kg) and disperse.The traders mix all varieties and overprice them by selling them all for Rs 2,600-3,000, said Singh.Farmers should be asked to bag graded onions so that they earn their rightful dues.
 
APMC traders,he said,also procure 98% of the produce for as little as Rs 1,000-1,200 per quintal and deliberately buy the remaining 2% for Rs 3,000.They do this just so they can quote Rs 3,000 as the benchmark purchase rate and sell to retailers for a higher sum.
If that was not enough,traders use the pretext of drying onions to hold back stocks for three or four days,fuelling an artificial shortage that spurs price rise.
Confirming what NAFED managing director Sanjeev Chopra had said a few days before,the NCCF chief said that there was an unexplained discrepancy in supply and pricing.Chopra had said the shortage caused by unseasonal rain was minor and did not warrant such a phenomenal price rise.On Friday,Singh furnished a chart that had details of daily arrivals in all producing markets in the country.He pointed out that while arrivals were on par with last year,prices remained two or three times higher than 2010.
It is time the government revisited the APMC Act which drives monopoly, he said.We are facing a crisis situation with farmers and consumers both bearing the brunt of the situation.APMC traders have the power to control prices and they should turn their attention to the woes of the common man. NCCF has a membership of hundreds of cooperative store outlets including Apna Bazar and Sahakari Bhandar and Singh feels the government could directly procure onions from farmers and sell them cheap through such networks.

Ingenious Ways To Raise Prices

Awell-oiled cartel of APMC traders,who are the only ones farmers may sell to,rigs prices in several ways,say officials

MIXED BAG |

Farmers who bring truckloads of different varieties of onions sell their produce for Rs 1,000-1,200 per quintal (100 kg).The traders then mix all the varieties and sell them for Rs 2,600-3,000

PUSHING UP MARKET RATES |

Traders procure 98% of the produce for as little as Rs 1,000-1,200 per quintal and buy the remaining 2% for Rs 3,000.This allows them to increase the benchmark purchase rate

HOARDING |

Under the pretext of drying onions,traders hold back stocks for 3 days fuelling an artificial shortage
 


No Takers for Chinese and Pakistani Onions

Mumbai: Around 200 tonnes of onion that have been imported from China and Pakistan are rotting for want of takers.Retailers have refused to stock low-quality onions from Pakistan and the Chinese import is bland and unsuited to the Indian palate.Moreover Indias late kharif crop has yielded a bumper harvest and this fresh influx has also rendered the imports useless.The government agency National Agricultural Cooperative Marketing Federation (NAFED),which has been saddled with these supplies,will incur huge losses by having to make a distress sale.Meanwhile more deliveries are in the pipeline.The government has contracted around 1,000 metric tonne (mt) for import of which 200 mt have arrived and are rotting.NAFED chairman Bijender Singh confirmed the development.Retailers are refusing to pick up imported stocks because local arrivals have started entering the market.We will have to sell the imported onions at a cheap price.We stand to make losses,but we did what was asked of us. He declined to quantify the volume of import or the loss.
The decision to import vast quantities of onion by the Anand Sharma-led ministry of commerce has cost the country precious foreign exchange,said experts.Instead of Wagah,Pakistani onions now come via the sea route and are almost rotten after ten days in transit, say sources in New Delhi.Chinese onions that weigh half a kilogram apiece lack pungency and are so bland they taste like cucumber.
Mother Dairy,one of NAFEDs distributors in New Delhi,refused to stock the bulbs saying the imported onions finds few takers at the rate of Rs 32-35 per kg.They would rather sell the small local variety from Gujarat and Maharashtra, says an observer.Commerce minister Anand Sharma was not available for comment and Mother Dairy declined to speak.


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