According to the Nasik-based National Horticultural Research and Development Foundation (NHDRF), recent rains in key growing areas of Maharashtra and Andhra Pradesh have impacted supplies that has pushed up onion prices to as high as R80 a kg in many cities including Delhi.
Wholesale onion prices at mandis across Nasik, Pune and Ahemednagar in Maharashtra have been in the range of R3,500 to R4,000 a quintal in the last few days, R P Gupta, MD, NHDRF told FE.
Onion prices on Monday rose sharply again to Rs 75-80 per kg, up by about 30% from Rs 60 per kg level in the last week. Traders attributed the increase in onion prices to supplies constraints from producing states, especially Maharashtra, Gujarat, Karnataka and Andhra Pradesh.
C B Holkar, Nafed board member, said the kharif crop ready for harvesting in Maharashtra has got damaged to an extent and hence supplies could not be maintained.
At present, onion supplies are less than 50% of the country's monthly estimated total demand of a million tonne. Price volatility would continue for another few weeks as the stored onions have also got exhausted, Holkar said.
The government on Tuesday said the spike in onion prices is due to artificial scarcity and asked state governments to take firm action against hoarders.
"We have enough onion stock in the country. The state governments must act firmly against hoarders who are hoarding onions which has led to the artificial scarcity and sharp escalation of prices," commerce minister Anand Sharma said.
An agriculture ministry official said supply is restricted during the July-October period as chunk of production is grown during the October March period, which includes late kharif and rabi seasons.