Onion prices are on the rise due to the late arrival of the new crop and the depleting stock of stored summer onions with farmers and traders. Modal prices touched Rs 3,000 per quintal on Tuesday at Lasalgaon, country’s largest wholesale market for the bulb with arrivals dropping to about 8,500 quintals. On Monday, arrivals were slightly higher at 10,480 quintals with modal onion prices touching Rs 3,100 per quintal. Last week, average onion prices were Rs 3,200 per quintal. The average wholesale onion prices increased by 25% in five days from Rs 2,561 per quintal on Monday to Rs 3,200 per quintal at Lasalgaon APMC on Friday due to rise in demand. According to Jaydutt Holkar, chairman, Lasalgaon Agriculture Produce Market Committee (APMC), the summer stock of onions with farmers has almost exhausted and may last another eight days. The arrival of fresh kharif crop is yet to pick up, which has led to shortage of supply, he said, adding that the prices may stabilise once arrivals normalise by mid December.
Onion prices had begun rising post Diwali on short supply and pressure caused by demand from the southern states. Prices were in the range of Rs 2,500 per quintal then and traders had hiked it to Rs 3,000 per quintal for better quality onions, industry people said. During this period, the highest retail rate of the season was seen at the Lasalgaon APMC market at around Rs 40 per kg. Rates are expected to be in the high range till the first week of December. “Presently, the market is being supplied with both the stored summer variety and the freshly harvested red variety. Both these crops are competing for prices,” Holkar said. Unseasonal rains and thunderstorms during the last three months have taken a toll on the red onion crop which was expected to hit markets by now. The rains delayed harvesting, which has led to the short supply significantly. There are reports of Centre mulling over reimposing a minimum export price (MEP) of $700-800 per tonne on onion to curb exports and check local prices. MEP is the minimum rate below which export is not allowed. Onion MEP was scrapped in December 2015.
Holkar said that there are reports of a meeting slated to be held in Delhi on this issue. However, if MEP is reimposed, it will not help the situation since the red variety of onion cannot be stored and has to be disposed off immediately. This will restrict exports and add to farmer woes, he said. Concerned over the rise in onion prices, consumer affairs minister Ram Vilas Paswan, in August, had sought the commerce ministry to fix MEP of onion at $450/tonne and remove sops to restrict exports. Supplies got exhausted as large quantity of exports were undertaken in the first four months of this fiscal. The country exported 12.29 lakh tonne in April-July of this fiscal, up by 56 % from the year-ago period. Also, the new 2017-18 kharif crop, which is being harvested is expected to be less owing to fall in acreage.