Prices of onion, wheat and pulses fall on fear of government action

Pune: The prices of pulses, wheat and onion fell substantially following a series of price control measures announced by the central government last week.

Wheat prices have declined by 15% in the last four days after the central government tightened the stock holding limit on traders and processors.

Likewise, the wholesale prices of onion at the benchmark Lasalgaon APMC in Maharashtra have crashed by 15-20% after the Centre banned onion export on December 8 and the decision to allow duty-free import of yellow peas has led to a fall in prices of all the pulses, trade insiders said.

They attributed the quick response to the price control initiatives to fear among trade participants about government action.

“With the way the government is controlling all the commodities and due to the Open Market Sales Scheme (OMSS), the stockists are not interested in holding the wheat stocks,” said a wheat processor from Uttar Pradesh, who did not wish to be identified.

The price of wheat in the open market has dropped from around Rs 27 per kilogramme to Rs 25-25.50/kg.However, wheat processing industry officials said such a big fall in prices is an overreaction of the market and that the prices may rise again gradually.In the case of onion, the maximum price at Lasalgaon APMC on Tuesday was Rs 34/kg against Rs 42/kg on December 7 while the average price of old onion dropped to Rs 28/kg from Rs 33/kg during the same period.

Union consumer affairs secretary Rohit Kumar Singh in a press briefing on Monday had said the government expects the onion prices to go below Rs 40/kg by January.

At Latur APMC in Maharashtra, the wholesale prices of urad and chana are down by Rs 5/kg each, while the prices of tur and matar (peas) are down by Rs 7/kg and Rs 15/kg, respectively.

“Not only are the prices of pulses have come down but even the demand is also weak. There is fear in the market about the government action,” a pulses processor from Maharashtra said, requesting not to be identified.

According to trade sources, at least 300,000 tonnes of yellow peas could be imported in the country till March 2024, which is expected to keep a check on prices of chana dal.

The year-on-year sowing of chana is currently trailing by 9%. In case of tur/arhar, in addition to the local harvest, which has already started trickling in the local mandis, import of tur from Myanmar is expected to begin in January.