BackIn a few weeks, onions may not be eye-wateringly pricey anymore
Improved arrivals from mid-January may bring down prices by as much as 80%The govt sought to control prices by banning exports, restricting hoarding and increasing imports, yet the rally continued with shipments from overseas not due to arrive until 27 Dec
PremiumIndia’s rampant onion prices may finally be running out of steam, with fresh supplies of the pungent vegetable set to hit the market next month.
Prices at one of India’s biggest wholesale markets may plunge to about ₹20-25 per kilogram from mid-January, according to Jaydatta Sitaram Holkar, a director at Agricultural Produce Market Committee, a state-run wholesale market for farm commodities at Lasalgaon in Maharashtra. That’s more than 80% below Tuesday’s record price.
A new onion crop should help ease what has been a catastrophic year for the vegetable in the world’s second-most populous nation. Soaring prices have been blamed for accelerating food inflation and even triggering onion thefts and fist fights, according to some reports.
Eye-Watering Onions
The key ingredient for Indian curries and chutneys is so ubiquitous that economists are keeping a close eye on prices for signs of when the central bank may cut rates.
The country usually produces more onions than it needs. But this year, heavy rains and flooding damaged stockpiles as well as the monsoon crop in the main growing areas, according to Siraj Hussain, a visiting senior fellow at the Indian Council for Research on International Economic Relations in New Delhi.
“The government should provide grants to farmers to create modern storage facilities" to cut losses, said Hussain. An estimated 30% to 40% of winter onions get lost in storage every year, he said.
The government sought to control prices by banning exports, restricting hoarding and increasing imports, yet the rally continued with shipments from overseas not due to arrive until Dec. 27.
Prices surged to a record ₹111 per kilogram on Dec. 17, according to Narendra Savaliram Wadhavane, a secretary at the state-run wholesale market. Average wholesale prices are still about 80 rupees per kilogram, compared with about ₹15 in June and July.
Hussain, a former agriculture secretary, warned the government’s decision to limit onion stockpiles could hurt farmers when prices come down again as they’ll be forced to sell despite poor profit margins. Prices are historically volatile, sinking as low as 0.5 to 1 rupee per kilogram toward the end of 2018.
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