S K Chadha, managing director of Nafed, the state owned cooperative marketing federation which maintains stocks for central government, said onions have a shelf life of three and a half months, after which they dehydrate.
“We have been buying onions since March-April for the buffer stock. It’s been 6-7 months. So, damages in the stock is quite normal,” he said.
He said Nafed had offloaded about 43,000 tonnes of onions in the market, and can release another 22,000 tonnes by the first week of November. “The remaining 25,000 tonnes are likely to be damaged,” he said.
The government has started building buffer stock for onion since last year so that it can intervene in the market when retail onion prices rise.
“Last year, Nafed created buffer stock of 57,000 tonnes. Out of which around 30,000 tonnes of onions were damaged and only 27,000 could be distributed. This time, situation is better. We have created around 1 lakh tonnes, out of which only 25,000 tonnes are likely to be damaged.
After the spike in onion prices, the centre has received orders of 35,000 tonnes from states like Kerala, Assam, Tamil Nadu, Andhra Pradesh, Telangana and Lakshadweep. Nafed is offering onions at Rs 26 per kg plus transportation charges.
Apart from that, the consumer affairs ministry has also asked Nafed to create a fresh buffer stock and start buying onions when the fresh harvest hits the market.
“We will be maintaining buffer stock round the year by replenishing the stock,” said a senior consumer affairs ministry official.
Onion prices are likely to cool down by first week of November through government’s import intervention. It has relaxed norms for easing imports of onions and asked state marketing agency MMTC to launch bid for importing red onion.
Private traders have already started importing onions from from Afghanistan, Turkey, Dubai and Egypt and in next two weeks, around 6,000 tonnes of bulb will arrive in India.
“The landing cost would be around Rs 40-45 a kg which much less than the prevailing cost in wholesale mandi of Nashik where prices are in the range of Rs 60-65 a kg. The imports will control the price rise,” said Ajit Shah, president of onion exporters association.