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Onion price hits two-year high of `4,900 per quintal at Lasalgaon
Retail prices of onion have already touched Rs80 per kg in Delhi
New Delhi: Onion prices at Lasalgaon in Maharashtra, India’s largest wholesale market for the crop, touched a two-year high on Thursday due to lower market arrivals, in turn driven by adverse weather and poor crop prospects.
Onions traded at ₹ 4,900 per quintal at the wholesale market with just 3,900 quintals of produce available. A year ago, on the same date, 13,860 quintals were traded in the market at less than one-third of the current price: ₹ 1,600 per quintal.
The supply crunch has seen retail prices of onion shoot up too; in the national capital of Delhi onions are selling at between ₹ 60 and ₹ 80 per kg.
And if a recent crop status report prepared by the National Horticultural Research and Development Foundation (NHRDF) in Nashik, Maharashtra, is to be believed, prices may not come down till end-October when the fresh kharif (summer) crop hits the market.
Experts, farmers and traders contend that the present situation is due to prolonged adverse weather in onion-growing areas.
The rabi (winter) crop that was harvested between March and May was of poor quality due to untimely rains, and less quantity was stored compared to the previous years, said R.P. Gupta, director, NHRDF.
“Due to the poor rainfall situation in onion-producing areas of Maharshtra, Karnataka and Andhra Pradesh, kharif sowing has got delayed and the crop will be harvested late,” he added.
Gupta said that lower kharif crop prospects could be prompting traders and farmers to hold on to existing stocks.
India produced 18.9 million tonnes (mt) of onions in 2014-15, marginally lower than the 19.4 mt produced the previous year. The poor quality of the winter harvest, which accounts for 55-60% of total production in a year, is to blame.
At present, around half the 4 mt of stored stock has been used up while 10-15% was lost in storage, said the NHRDF report released on Wednesday. Only 1.6-1.8 mt of onion are available for consumption in the country, it added.
Farmers said few among them are benefiting from the price spike.
“When the government increased the minimum export price of onions (from $250 per tonne in April to $425 per tonne in June), farmers sold their produce to traders out of fear of lower prices in future,” said Pandharinath Ahire, an onion farmer from Nashik.
“Now, traders are releasing stocks slowly and only about a fifth of the farmers who held on to their stocks are profiting from higher prices,” he added.
Not everyone agrees.
“Market arrival in Lasalgaon is 10% of the normal as the last harvest was of poor quality (due to unseasonal rains). Arrivals are lower in Bangalore and Kurnool in Andhra Pradesh as the early kharif harvest is lower due to poor rainfall this monsoon,” said Nanasaheb Patil, chairman of the Lasalgaon Agricultural Produce Marketing Committee.
In Nashik, seedlings are ready to be planted, but there are no rains, he added.
To counter rising prices, the centre has asked state-owned MMTC Ltd to float a global tender to import 10,000 tonnes of onions. Traders in Maharashtra and Punjab have also placed orders from import from Egypt and Afghanistan and this could ease the price situation, said Gupta from NHRDF.
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Business NewsIndustryOnion price hits two-year high of `4,900 per quintal at Lasalgaon
First Published:20 Aug 2015, 03:39 PM IST
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