Centre Rolls Out 'Kanda Express' As Onion Prices Rise 19% Within A Month

Onion prices are once again becoming a headache for Indian households.

According to official data, the average retail price of onions has climbed to around Rs 42 per kg -- nearly 45 per cent higher than a year ago, and about 19 per cent higher than a month earlier. 

To ease onion prices, the central government, starting today (August 24), has started running special trains carrying onions from Nashik to major consumption centres, including Delhi, Chennai, Kochi and Guwahati. The service has been named 'Kanda Express'. 

The idea is to move onions from areas where supplies are available to cities where prices have shot up.

Why Onion Prices Are Rising

The latest price spike comes amid lower onion output and tighter supplies. Onion prices are particularly high in some major cities. Reports said Delhi was seeing prices of around Rs 65 per kg, while Chennai was around Rs 58 per kg. 

For households, this is more than just a vegetable becoming expensive. Onions are used almost every day. A sustained rise can also add to food inflation, especially when prices of other kitchen staples are moving higher.

The government, therefore, is looking to improve supplies before the price rise becomes sharper.

Centre May Release Buffer Stocks

The Kanda Express is only one part of the government's response. The Centre is also looking at releasing onions from its buffer stock into the market. According to reports, the government may start offloading these stocks to bring down retail prices. 

The buffer stock is meant to act as a cushion when prices rise sharply. Instead of waiting for fresh supplies to arrive, the government can release stored onions into markets facing shortages.

The Centre has also been strengthening procurement for the buffer. In July, it raised the procurement price of onions from Rs 1,875 to Rs 2,125 per quintal, a 13 per cent increase. The government said the move would give farmers better returns while supporting buffer procurement. 

Can Kanda Express Bring Prices Down?

The immediate objective is to ease supply pressure in cities where onions are expensive. Rail transport can help move larger quantities from producing regions to consuming markets. 

If the problem is mainly a temporary supply gap, releasing buffer stocks and moving onions to deficit markets could provide relief. This is significant as an onion price shock does not stay confined to vegetable markets. It quickly finds its way into household budgets, restaurant bills and food inflation.