Onion Prices Set to Rise: 30% of India's Buffer Stock Damaged, 'Kanda Express' Launched

A concerning situation has emerged regarding India's onion supply, as approximately 30% of the Centre's summer buffer stock has suffered from rotting and sprouting. According to officials from the National Agricultural Cooperative Marketing Federation of India (Nafed) and the National Cooperative Consumers’ Federation (NCCF), a significant portion of the 1.2 lakh tonnes procured this year has already been lost. Experts warn that spoilage could reach as high as 40% this season, compared to the typical annual loss rate of 20%.

The primary cause of this deterioration is attributed to unseasonal rainfall during the harvest season, which severely impacted crop quality and reduced shelf life. This development comes at a critical juncture, as stored summer onions are essential to maintaining market supply until the next major harvest arrives. The situation is further aggravated by delays in the kharif crop cycle, leading to heightened concerns about long-term availability and potential price hikes.

To stabilize the market, the government has launched the 'Kanda Express,' a special train dedicated to moving onion stocks. The first train, carrying nearly 500 tonnes of onions, departed from Lasalgaon, Maharashtra, bound for Delhi. Despite a 24-hour delay caused by the need for rigorous grading and sorting, the shipment is now en route. Similar rail services are expected to be deployed to reach cities including Kolkata, Chennai, Ernakulam, Madurai, and Guwahati to ensure equitable distribution.

As part of the government's market intervention, the onions transported via these rail services will be sold at a subsidized rate of 35 rupees per kilogram through Nafed, NCCF, and Kendriya Bhandar outlets. This initiative aims to curb retail prices, which have recently spiked to between 50 and 65 rupees per kilogram in several urban centers. Furthermore, the government has utilized road transport to move additional 30-tonne consignments of onions to the capital to augment supply.

The crisis is further complicated by the fact that farmers are offloading their private stocks earlier than usual, driven by fears of further spoilage and the incentive of favorable wholesale prices. In the Nashik district, the hub of India's onion production, storage facilities are currently estimated to hold only about 25% of their total capacity. Given these compounding factors, the Indian government is facing significant challenges in managing food security and controlling vegetable market inflation in the coming months.