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How 'artificial' onion crisis created by Indian traders helped Pakistan

India Today logo India Today 15-09-2017

Pakistan, Bangladesh and Sri Lanka were to be the beneficiaries of an artificial onion scarcity being created by Maharashtra traders, reports accessed by India Today indicate.

"Onion prices have been spiralling in the sub-continent, especially in these countries, and traders in the onion belt of Maharashtra were trying to export to these countries and make a killing while hoarding continuously in India," say sources.

On Friday, the top onion traders in the country were raided. These included the biggest names in the trade, Om Prakash Raka of Lasalgoan, Khandu Pandit Deore of Umrane and Rameshwar Atal of Yeola.

The income tax raids in Nashik district were the culmination of weeks of hawk like vigil being kept by none less then the Intelligence bureau at the Centre and the state governments.

With prices of essential commodities likely to spiral as a result of a spike in the price of international crude oil, the Intelligence Bureau had raised red flags a month ago at least for onions.

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Prices started rising by 50 per cent and 20 per cent in Lasalgaon and Delhi markets, respectively, beginning August 1 and by September first week, the Centre decided it was time to act.

A pattern in fact has been emerging that showed the same traders who were raided on Friday had been involved in the artificial price hike in 2010 and 2015 as well.

So wary has the Centre been that it has decided to import onions all the way from Egypt to make up for any shortfall till the arrival of the Kharif crop.

The income tax department realised that the modus operandi was to restrict the movement of trucks coming to the mandis on Friday. By weekend prices would start rising. Reports accessed by India Today indicate, "there have also been inputs of some traders in Lasalgaon and Pipalgaon holding back movement of stocks for the next 3-4 days in order to create artificial shortages".

Intelligence inputs from across the country reveal a pact between some traders to not sell wholesale onion below Rs 27 per kg in the North-East and Rs 25 per kg in the rest of the country, for the current week.

The price range has risen from Rs 500 to Rs 1,500 per quintal to Rs 80 to Rs 2,000 a quintal in Lasalgaon, and from Rs 500 to Rs 2,000 a quintal to Rs1,000 to Rs 2,125 per quintal in Delhi in the last six weeks.

The onion crop was hit due to heavy rains this time and certain Maharashtra-based traders stoked fear of an impending scarcity, in order to raise prices.

The current short supply of onions is due to heavy rainfall in Maharashtra and Karnataka and scarcity of crop in Gujarat, Rajasthan and Madhya Pradesh. Farmers and traders usually stock good quality summer onions better called the Unhali variety for release in the lean season of August-September. This variety has a shelf life of six months due to lower moisture content.

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