Bhubaneswar, Aug. 2: The state government today resorted to market intervention by fixing the price limit for onion, which is now selling at Rs 25 a kg in retail market.

Food supplies and consumer welfare minister Surya Narayan Patro today asked the traders to sell onion within Rs 17 per kg and warned stern action in case of hoarding the commodity.

Patro said the department had been instructed to keep close watch over the price situation. Officials will purchase onion from the source and sell it at fair price shops of the government named as "Maitree" at reasonable price. In the first phase, it will be sold in Bhubaneswar and Cuttack. The department has been asked to keep a token of Re 1 profit margin per kg and sell it to make the retail price affordable for the consumers.

However, consumers have been left high and dry as onion price is now selling in the city at Rs 25 per kg. The price of onion was Rs 15 per kg early last week.

The rise in onion price following the soaring of tomato price has hit the consumers hard. Last week, tomato was selling at Rs 100 per kg in retail market.

The state needs nearly five lakh tonnes of onion annually of which it produces nearly three to 3.5 lakh tonnes. Odisha produces onions mainly in Kalahandi, Balangir, Boudh and Angul districts as well as a few areas in the state's western districts. Odisha depends mainly on Maharshtra, Andhra Pradesh and Madhya Pradesh for procurement of onions.

Wholesalers said the recent floods in Nashik and crop loss in Andhra Pradesh had led to the price rise. "The price of onion has increased at source points. The city is getting the normal supply of 10 to 15 trucks of onion on daily basis, but as the price has increased in the procurement areas, it has its impact in the state as well," said Odisha Byabasayee Mahasangha secretary Sudhakar Panda.

Traders apprehend that the current price would prevail till November. "The winter crop from Nashik will reach the state in November. Besides, onions grown in various parts of the state will also enter the market in the winter and then the price will stabilise," said Panda.

Farmers and traders said the state was suffering because of lack of adequate number of cold storages. The state had witnessed distress sale of onions in March. However, the state government had attributed distress sale to the over-production of the crop.

"However, the state government is yet to come up with adequate cold storages to ease the problem," said Abhiram Jena, a farmer.

On the other hand, consumers are still bearing the brunt of price rise. "The consumers have been badly hit by the skyrocketing prices of vegetables during rains. In this circumstances, price rise of onions will definitely put burden on us," said Nirakar Pradhan, a consumer.