He also said the Centre has asked producing states like Maharashtra to crack down on hoarders of onion, a politically sensitive commodity. (Agencies)
Normally, onion prices rise during the lean period of June-August. But prices remained high both in retail and wholesale markets this month with rain in southern states delaying harvesting.
"Onion prices will begin normalizing by end of this month or early next month as more produce will come from Andhra Pradesh, Karnataka and Tamil Nadu," Thomas said.
Onion exports have declined after the government imposed minimum export price (MEP) of USD 650 per tonne. Imports have been permitted, but no shipment has arrived so far, the Minister said.
Thomas attributed the slight increase in food inflation in August, apart from high onion prices, to increase in the minimum support prices (MSP) of major farm items by the government. "We have raised MSP of major commodities. Prices in the open market cannot be lower than MSP," he said.
Meanwhile, wholesale and retail prices of onion have gone by Rs 10 a kg in the national capital on Tuesday as supplies have dried up in Maharashtra and Rajasthan, while arrivals from southern states are not in full swing due to rain there.
In Delhi's Azadpur market, wholesale price rose to Rs 60 a kg on Tuesday from Rs 50 a kg on Monday. The price rise is reflected in retail markets, with vendors are charging as high as Rs 70 a kg today as against Rs 55-60 a kg few days ago.
Meanwhile, government efforts to check price rise by increasing supplies through imports have not fructified as NAFED is yet to place order with global suppliers due to phytosanitary issues. The co-operative major has invited tenders for import of onions.
A government official said 25 onion containers imported by private players are stuck at various ports. Customs authorities have cleared a few tonnes of onion imported from China.
Prices in consuming states have come under pressure as supplies from Maharashtra are about to exhaust and farmers and traders have resorted to hoarding in anticipation of better prices, sources said.
Besides, traders of Andhra Pradesh and Karnataka are not transporting onions to other consuming states as the new crop has high moisture level because of rain, they said.
Farmers have not able to dry the crop due to heavy rain in those states. Hence, much of the crop is being consumed locally, they added.
He also said the Centre has asked producing states like Maharashtra to crack down on hoarders of onion, a politically sensitive commodity.