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The government plans to release 500 metric tonnes (MT) of onions from its buffer stock to select cities that are facing up to 50% increase in the commodity’s rates and also planning more measures to tame its price during the upcoming festive months of October and November, three officials familiar of the matter said.

The proposal is under consideration by the competent authority, the officials said requesting anonymity.

The identified select places are located in the north-east region and Jammu & Kashmir (J&K) along with cities such as Mumbai, Delhi, Kolkata, Hyderabad, Ahmedabad, Pune and Indore, they said.

The Directorate General of Foreign Trade (DGFT) on Monday banned export of onions by putting the commodity under the “prohibited” list with immediate effect, which HT has reported.

One of the officials said: “An inter-ministerial group has proposed to release 500 MT of buffer stocks of onion, which are approaching their end of shelf life. The supply will be meant for select cities that are experiencing the highest prices of the commodity.”

However, the officials said the price rise is not uniform across the country. The retail price of the commodity jumped 33% to Rs 40 a kilogram (kg) in Delhi this week.

“One of the reasons for a spike in onion prices is a surge in exports. In August, there had been steep increase in the export quantity. About 3 lakh MT of onion was exported in August, as compared to 1.26 lakh MT during the same period last year,” a second official. The price rise could be steeper in October and November, he added .

“The move is to signal to the market about the government’s intervention to keep onion prices in check,” the official said. Onion prices in mandis have reported up to a 200% jump in September, as compared to 154% in August, the official added.

The government is also concerned about the shortage of onion seeds in the rabi season, a third person said. “Among the five major onion-producing states, Maharashtra is experiencing a shortage of onion seeds to the tune of 505 MT,” he said.

“There could be an overall 10% shortage of onion seeds for the ensuing rabi season in the country. However, in Maharashtra alone, the shortage is 30%. Nashik is facing the maximum shortfall of onion seeds,” he added.

Plans are afoot to procure 200 MT of onion seeds from Gujarat and other parts of Maharashtra for supply to Nashik. Onion seeds could be imported from those countries that grow the commodity in abundance, he added. The sowing of onion will start from the last week of October.

The export of onion was also banned last September due to supply constraints. The commodity’s price had soared to Rs 80 a kg last December in the national capital.