Onion price falls as humid weather forces farmers to bring out stock

Written by Nanda Kasabe | Updated: Aug 13 2014, 05:05am hrs
Humid weather conditions, inclusion of onions in the Essential Commodities Act and limits placed by the Centre on stockholding have forced farmers to bring the commodity out of storage into the market, resulting in a huge fall in prices. Onions are now retailing between R20-30 per kg in several markets on the back of greater arrivals.

Arrivals in Lasalgaon, the biggest onion wholesale market, increased to 10,110 quintals per daywith nodal prices touching R1,425 on Friday and R1,550 on Monday. The arrivals, which had declined in the range of 9,000 to 10,000 quintals a day, increased to 12,000 quintals last week. In July, onions were retailing between R40-60 per kg in markets, as a result of which the government decided to include it in the Essential Commodities Act. The Delhi government also began purchasing onions from Nashik through Nafed to prevent price rise.

According to Nanasaheb Patil, chairman, Lasalgaon Agriculture Market Produce Committee, the rise in MEP of onions to $500 per tonne and limits on stockpiling resulted in the price drop. "In the month of 'Shravan' demand for onions usually declines by 6%. Then the floods in Odisha and Bihar resulted in closure of several onion-buying pockets. Added to this is new crop arrivals from Andhra Pradesh and Karnakata in small quantities. The most important aspect, however, is that the shelf life of the existing crop is poor and onions cannot last in these humid conditions. Therefore farmers are forced to remove the commodity from storage and make good their losses before the situation worsens," he explained. Losses to the farmers are to the extent of 30-35%, he said.

Patil added that onion export has declined in the first quarter of this financial year due to scarcity of good or export quality produce in the market. The unseasonal rain and hailstorms earlier this year damaged the summer crop in Nashik district, which contributes 70% of the export.

India exported 3 lakh tonne of onions in the first quarter of the current fiscal, a drop of 44.34% compared with the 5.39 lakh tonne sent abroad in the same period in the last financial year, a source from the Maharashtra State Agriculture Marketing Board said.

Patil, also director of National Agriculture Co-operative Marketing Federation of India,pointed out that the summer crop harvested in April and May is arriving in the market. Around 50% of this crop was damaged due to rain and hail. As a result, the quality of onions was poor, reducing its shelf life from six to three-four months. There are chances of spoilage during transportation as well. These are the reasons why onion export has been affected," he said