With onion prices at a record, Competition Commission officials plan to visit states to get a better understanding of the market as they try to determine if cartelisation is making the commodity expensive.
The Competition Commission of India (CCI) has kept tabs on the onion market for some time, although it is yet to gather substantial evidence of possible cartelisation or other unfair trade practices that may be pushing prices higher.
"We will be visiting states to have a better understanding of the ground situation (of onion markets). We want to have substantial evidence before deciding on investigation," a source told PTI.
The officials are likely to visit states including Maharashtra and Karnataka. Gujarat and Andhra Pradesh are also among the major onion-producing states.
In the past few days, onion prices have soared, touching as much as Rs 100 per kilogram in major cities.
Onion prices have been a politically sensitive issue and the steep jump in rates has come when elections are scheduled in some states in November and December.
According to the source, the Commission has been getting good feedback from states on onion markets. Earlier, the regulator had written to states seeking information on the onion markets amid rising prices.
There have been concerns that cartelisation and hoarding by traders and other entities are jacking up prices of the edible bulb.
On Friday, the Union government said there was no need to be "alarmed" about the crisis and that prices would cool down in the next 10 days with improved arrivals from the domestic and overseas markets.
In September, CCI Chairman Ashok Chawla had said the Commission was looking at whether the issue of rising prices needs to be investigated.
"We will see how it plays out further. We will see whether it warrants an examination or not.
"This is again an issue on which the Commission had spent some time in the past...and come to a conclusion that the markets don't seem to be functioning very well. But there was no evidence of cartelisation," Chawla had said.
Last year, a study instituted by the Commission found clear imperfections, including cartelisation and hoarding, which impact the price of onions.
"Results of seasonal indices, correlations, daily, monthly arrivals, their prices, etc, indicated existence of anti-competitive elements in the onion markets.
"A few big traders having well-connected networks with market intermediaries in other markets seem to play a major role in hoarding for expected high prices," it had revealed.