In a move that could further push up Onion prices in India, traders in Indian city Nashik and adjoining areas on Monday went on two-day strike against tax raids and disrupted supply to contracting traders from other states who are being forced to sell the vegetable at "below the cost price".
"The contracting traders have said that it would be unviable to sell below Rs 30/kg as the buying cost of onion is higher than that," Nashik-based District Deputy Registrar Cooperative Societies Bajirao Shinde told PTI.
This has virtually halted the supply of the bulb from Nashik and Lasalgaon in the western Indian state Maharastra, Asia's biggest onion market.
The retail price of onion, which is ruling at Rs 55-60/kg in metros, is expected to shoot up further in next few days in the wake of a short supply due to the strike.
"Onion traders in Nashik, Lasalgoan and Pimpalgoan are on strike for two days because the contracting traders from states like Delhi and Kolkata have asked them not to supply," Shinde said.
Traders are protesting on fears of losses as onion, being a perishable commodity, cannot be stored if traders from neighbouring states continue to stop buying, he said.
Shinde, who oversees the functioning of onion markets, said the contracting traders from Delhi, eastern states Orissa, Kolkata, Assam, and Bihar are are not buying because their state governments have asked them not to sell onion more than Rs 30/kg in the wholesale markets.
Currently, the wholesale price of onion in Nashik is ruling at Rs 37/kg. At Lasalgaon, Asia's biggest onion marekt, prices were ruling over Rs 43/kg.
Besides, traders are also miffed with the income tax raids conducted in some parts of the state, the official said.
Nashik and Lasalgaon region in Maharashtra supply large quantity of onions to Delhi, Kolkata, Bihar and North Eastern states.
Maharashtra is one of the largest producers of onion in the country with an average outuput of over 30 lakh tonnes.