Onion prices up 10%, at four-year high

Barely two days after the government showed conviction over price decline due to steady increase in supply, onion prices jumped by 10 per cent to trade at over fouryear high of ~55.50 a kg in the benchmark Lasalgaon mandi on Monday.

Onion is currently trading between ~70 and ~80 in retail markets across the country and is approaching the ~100-mark fast.

The rates have shown a four-fold increase in the last three months in wholesale markets from ~13 a kg in early August to ~55 now and retail price from ~20 to ~80.

Traders attribute the sudden spurt in prices to the very little quantity from last year ’s production, crop damage due to unseasonal rain across the country and unfavourable government policy.

“Rain during October and November have so far resulted in widespread damage of the standing kharif crop. Thus, arrivals of early variety onion sown in South Indian states, including in Andhra Pradesh and Karnataka, were damaged. So, supply of new variety of onion, which was supposed to hit mandis in the second fortnight of October, is no longer available. Thus, onion prices are continuously rising,” said Jaydatta Holkar, chairman, APMC Lasalgaon.

Meanwhile, after banning onion exports and levying stock limit for domestic traders last month, the department of consumer affairs had convened a meeting of stakeholders last Friday. It concluded that the price increase was due to rain-driven supply disruption which has started improving in order to correct prices.

In fact, total onion arrivals in Lasalgaon mandi fell to a mere 20 tonnes, the lowest in several years, on Saturday, but recovered marginally to 180 tonnes. Surprisingly, three months ago, onion supply was hovering around 2,356 tonnes on August 2.

“The October rain damaged the entire kharif crop. Now, farmers have started sowing onion afresh which would be available for harvesting in February. Hence, the new supply would come to the mandi only in February. Since very little quantity of last season’s crop is left with farmers and stockists, onion prices are set to rise further. Consumers would have to bear with the high onion prices till Januaryend,” said Sanjay Sanap, a large onion wholesaler in Nashik district of Maharashtra.

The third advanced estimate from the ministry of agriculture says that India’s onion output was 23.49 million tonnes for 2018-19 compared to 23.26 million in the previous year.