Onion prices in India threaten to rise again on fall in production fears and rise in festive season demand

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Come October-November, onion prices may skyrocket, like they did last year and around the same time in many of the previous years, exposing the absence of a policy paradigm to ensure price stability of India’s staple vegetable, despite it being a political hot potato, Financial Express reports.

Already, wholesale onion prices have nearly doubled within a span of 10 days at Lasalgaon, the country’s largest wholesale market for the bulb. Retail prices have touched `50 per kg in Mumbai and Pune, and even `70 per kg in Delhi. Yet ironically, farmers are complaining as large-scale crop damage has dented their profitability.

The unseasonal rains in March and April this year with hailstorms caused rotting in storage. At present, the onion arrivals in the market are not of top quality but are commanding good prices due to the decline in arrivals.

According to market sources, onion supplies in the market at present are of summer variety, harvested in March and April and stored by farmers. It is believed around 30-40% of the stored produce has already rotted.  There was an extended monsoon last year which led to late sowing in December and this was followed by unseasonal rains in March and April, which led to rotting. The early kharif planting (Rangda onion variety) was also hit due to excessive rains and the new onion may enter markets by late November or early December. 

The current upward trend in prices is due to a decline in arrivals and excessive rains damaging onion crop stored across Maharashtra, Karnataka and Andhra Pradesh, three major producer states. Last week onion prices at Lasalgaon touched a minimum of Rs 1,000 a quintal and a maximum of Rs 2,411 per quintal with modal price at Rs 2,000 per quintal. Prices were similar on Thursday at the Mandi. Last week, arrivals dipped to 7,800 quintals per day from a level of 15,000 quintals per day a week before, with average price at Rs 1,640 per quintal and a week before, average price was at Rs 750 per quintal.

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