Onion prices may go up on kharif crop delay

Written by Nanda Kasabe | Pune | Updated: Sep 3 2014, 06:51am hrs
Consumers should be prepared to shell out more money for onions this September. According to senior officials

of the National Horticulture Research and Development Board (NHRDF), there may be a 5-10% hike in prices

this month owing to delay

in kharif crop arrivals in

the market.

The late monsoon has led to further delay in sowing and, as a result, there is a gap between stocks being brought out by farmers and traders and new arrivals in the market, officials said.

"New kharif crop arrivals usually begin by September. However, this time the arrivals can be delayed till October 15-20. Fresh crop arrivals have begun in Bangalore, Hyderabad and Kurnool, but delayed in Nashik, Satara and Pune regions because of delay in monsoon," RP Gupta, director, NHRDF, said.

"The government did put restrictions when prices had become high in the last couple of months. However, the stored stock cannot meet market demand. Therefore it is assumed that prices will increase this month since the new arrivals will take another month. Onion imports have eased the situation a bit so prices will not shoot up as before," Gupta explained. At present, the stock on hand is 15-16 lakh tonne.

According to Gupta, stored onions are usually brought into the market in August and from September, the ratio of the fresh crop is around 60% with 40% of stored stock. In October, the consumption of fresh stock versus stored stock is 50:50 and November onwards, 90% of fresh stock comes into the market.

On Tuesday, around 15,500 quintals arrived at Lasalgaon, the main onion hub. Modal prices touched R1,525 per quintal, with the minimum varying from R400 per quintal and maximum prices touching R1,881 per quintal. On Monday, modal prices touched R1,575 per quintal and 17,040 quintals arrived in the market.

Traders have imported 15 containers of onions from Egypt. Eight containers were received at Lasalgaon and seven were offloaded in Mumbai. According to senior officials, around 700 MT of onions were imported by private traders. The landed cost of onion at Lasalgaon works out to R25 a kg, which is higher than R15-20 a kg quoted in India. Therefore, wholesale prices should range between R20-26 per kg, Gupta said.

Nanasaheb Patil, chairman, Agriculture Produce Market Committee, Lasalgaon, and director of Nafed, did not agree with the views of NHRDF and said there is no scarcity of onions in India. "Market arrivals at Lasalgaon are more than what they were at the same time last year. Kharif arrivals have been delayed by four to six weeks but the monsoon has been satisfactory in Maharashtra. Around 1 lakh additional hectares was planted in the rabi season and even with the hailstorms and damage to the tune of 30%, around 50% extra produce remains with farmers," he said. Therefore, the decision of giving permission to traders to import onions is impractical and taken without considering factors such as price and quality, he added.

Patil had said at an earlier meet that onions and potatoes should not be included under the Essential Commodities Act. He said linking of onion prices to market arrivals at APMCs is wrong. Market arrivals this year have been good and if the prices are rising, the matter should be examined, he added.

Onions are planted on some 10-12 lakh hectares in the country, of which 3 lakh hectares is kharif crop, another 3 lakh is late kharif (which arrives in December-end) and 6-7 lakh is rabi crop. This time, there has been a seed shortage as well, which could reflect on supplies.