Onion prices show hefty rise on stock damage across India; fresh kharif produce awaited

Onion prices have increased by Rs 750 a quintal over the past ten days in markets across Maharashtra’s Nashik district, the commodity’s hub. But, prices are likely to head south once early Kharif onion begins arriving next month. Traders have raised the prices citing damage to stocks in storages. The rise in prices will also help bring the new crop to market soon after harvest. 

According to the Ministry of Agriculture and Farmers’ Welfare data, modal price (rates at which most trades take place) of onion currently is Rs 2,150 a quintal at Lasalgaon, Asia’s largest agriculture produce market committee (APMC) yard. A fortnight ago, on 13 September the price at Lasalgaon was Rs 1,400 a qintal.

Packed onion cargo delivered in Mumbai at Rs 1,600-1,700 a quintal two weeks ago is now being quoted at Rs 2,100-2,200 a quintal. Rainfall in the Nashik region has been higher this year, giving credence to damage in onion stocks.

However, traders feel onion prices this year will be lower than last year when the modal price of onion ruled at Rs 3,000 in Lasalgaon APMC. Exports of onions this year have been kept to its promise, despite prices being lower. Exports have been hampered by high freight rates, especially to the Far-East. Container availability has also been an issue. Exports are expected to pick up after November.

Pakistan’s new crop has hit the market and this year, arrivals are higher. As a result, shipments from the neighbouring country enjoy an edge. Pakistan’s stocks are from the new crop, whereas India is trying to export the old crop. Most countries prefer new stocks. Recently, Indian exporters cut their offer rates by $15 (Rs 1,105) a tonne, hoping to attract some demand.  Pakistan’s rates have also begun to increase. Currently, Pakistan is quoting onions at $300 (Rs 22,150) a tonne free-on-board compared with India’s $400 (Rs 29,500) a tonne.

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