Mumbai: India’s onion output in the year to March 2008 is likely to rise by 11.9% to a record 7.45 million tonnes (mt) on increased acreage and that will keep the lid on prices till June this year, a senior official said on Tuesday.
India, the world’s second largest producer, is likely to have 527,719ha under the crop in 2007-08, up from last year’s 478,440ha. India produced a record 6.66mt in 2006-07.
“Farmers got good returns last year and therefore this year they increased the area. Good rainfall and availability of seeds also helped,” Satish Bhonde, additional director, National Horticultural Research and Development Foundation (NHRDF), said.
The area under onion rose 10.3% mainly due to rise in acreage in Maharashtra, Gujarat and Madhya Pradesh, Bhonde said.
Onion, a major ingredient in Indian food, and a politically sensitive commodity, is typically cultivated thrice a year—in monsoon, winter and summer.
“Rising production would not pull down prices too sharply. The domestic demand is growing due to rise in purchasing power, and exports have also increased in the last few years,” he added.
Onion exports have doubled in the last five years to 1.16mt in 2006-07 from 506,924 tonnes in 2001-02.
The Gulf countries are the main buyers of the bulb, and neighbouring Pakistan and China are India’s main competitors in the global market.
However, in 2007-08, India’s exports are likely to ease due to government interventions.
In mid-2007, prices climbed on a shortfall. To augment supply, the government kept the minimum export price of onion above international market deflecting buyers to other destinations. Onion exports fell 23% in April-January from a year earlier to 764,897 tonnes, NHRDF data showed.
Bhonde said prices would remain steady in the domestic market till June on good arrivals in the physical market.
Wholesale prices in the country’s largest onion trading hub, Lasalgaon in Maharashtra, was Rs281 per 100kg on Monday, from a peak of Rs1,951 on 1 October.