Steady supply leads to crash in onion prices

Prices of onions usually spiral during November, a lean month when availability dips, knocking household budgets. This year, however, steady supplies have caused prices to crash, hurting farmers, market data show.

Wholesale rates in November have dropped to their lowest level in a year at Lasalgaon agricultural produce market committee, Asia’s largest trading hub for the commodity.

The vegetable is a base ingredient of most Indian dishes and there are alternate cycles of gluts and scarcity every other year.

Traders say the government has been releasing onions routinely from its buffer stock to keep retail prices steady.

At Lasalgaon, the average quality onion is selling at a wholesale price of ₹10-15 per kg, while cost of cultivation comes to ₹22-25, said Bharat Dighole, president of Maharashtra State Onion Growers’ Association.

All-india retail and wholesale prices were averaging ₹42-44 kg and ₹37.06 kg respectively in Delhi in the first fortnight of November, according to consumer affairs ministry data.

The government is releasing quantities of onion from its own stocks to “non-producing states”, or regions that don’t produce the vegetable from a federally held reserve of 250,000 tonne for 2022-23, an official familiar with the matter said.