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Wholesale onion prices crash to Rs 3.50 per kg, may fall further

Wholesale onion prices on Monday crashed to Rs 350 per quintal at Lasalgaon market — the country’s largest wholesale hub for the bulb.

By: | Pune | Updated: September 20, 2016 7:12 AM
Nanasaheb Patil, former chairman, Lasalgaon, APMC and director, NAFED, said he has been repeatedly saying that the quality of onions is deteriorating since the stored onion has been kept in onion chawls by farmers in anticipation of good prices. (Reuters) Nanasaheb Patil, former chairman, Lasalgaon, APMC and director, NAFED, said he has been repeatedly saying that the quality of onions is deteriorating since the stored onion has been kept in onion chawls by farmers in anticipation of good prices. (Reuters)

Wholesale onion prices on Monday crashed to Rs 350 per quintal at Lasalgaon market — the country’s largest wholesale hub for the bulb. Top industry officials expressed fears of a further fall in prices as there has been excess onion production this year, and with the arrival of the new kharif crop slated October onwards, farmers are now in a hurry to dispose of their stocks.

This is the lowest price recorded for the bulb in the last five years, Jagdish Holkar, Lasalgaon Agriculture Produce Market Committee (APMC) chairman, said. Around 10,500 quintals arrived at the market on Monday, with the minimum prices recorded at Rs 200 per quintal, maximum at Rs 480 per quintal and modal prices at Rs 350 per quintal.

According to market committee officials, the supply of summer onions, which were harvested in March and April, is likely to continue for another one-and-a-half months.

Nanasaheb Patil, former chairman, Lasalgaon, APMC and director, NAFED, said he has been repeatedly saying that the quality of onions is deteriorating since the stored onion has been kept in onion chawls by farmers in anticipation of good prices. However, because of excess production, that did not happen and instead, the farmer is now saddled with a crop which has lost weight and quality and he is now forced to sell at lower prices.

The new harvest of onion is set to hit the markets in October.

Significantly, most onion-producing states like Madhya Pradesh and Rajasthan have also had a bumper crop and therefore, there is little demand for onion from Maharashtra, market officials said.

“Last year, onion farmers got a good price and so, the area under cultivation increased, and so did the yield. We had written to the government seeking intervention, but didn’t get any response,” Patil said.

Atmaram Kumbharde, chairman, Chandwad APMC, had said that onion should have ideally been selling at Rs 1,000 per quintal at this stage, but instead prices have crashed to Rs 200-400 per quintal and even 5 paise per kg in many cases. Since 50% of the stored onion is already spoilt and there has been a 20-40% weight loss, there is no demand in the market as well, he added.

This price downslide now and possible shortages in future will continue regularly until the government finalises an onion policy, Kumbharde said. The condition of farmers is very bad as production costs are around Rs 800-1,000 per quintal, he explained.

Holkar agreed and pointed out that the short-sighted policies of the government would result in loss of farmer interest in the crop and a time will come when there could be crop shortage because farmers have shifted to other crops. “We have met chief minister Devendra Fadnavis, Union ministers Nitin Gadkari and Radha Mohan Singh. However, there does not seem to be much interest in the issue,” he said.

According to industry experts, the summer crop has a shelf life of five-six months and farmers prefer storing onions with a hope of getting better prices. Currently, onions arriving in the market are of summer crop, which is five months’ old. The average wholesale onion prices have declined from Rs 1,900 per quintal in December last year to Rs 350 per quintal due to a rise in supply as compared to demand. The farmers still have summer onions in their storage.

Meanwhile, market committees in Nashik district have directed farmers to fill up applications to avail of the Rs 100 per quintal grant announced by the government for onions traded between July and August. According to Holkar , barely 2.5 lakh quintals were traded during this period because of the APMC strike and therefore, a grant of some Rs 2.5 crore is expected to come to farmers in the region.

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