Onion prices across the country have hit a record-high on a supply squeeze due to last year?s drought in key growing areas and damage to this year?s crop in some states due to heavy rainfall. While officials at the National Horticulture Research Development Foundation (NHRDF) maintain that there is no shortage of stocks, traders say onion is in short supply and prices will remain high for the next one-and-a-half month until the new crop hits the market. Retail prices in Mumbai and Pune ranged between R55 and R70 per kg in the last two days.
Average prices at Lasalgaon, India?s largest wholesale onion market in Maharashtra, touched R4,500 per 100 kg on Thursday, rising R90 per quintal over Wednesday. Two months ago, prices were around R1,500-2,000 per quintal. Nashik, which reported arrival of 1-2 lakh quintals every day this time last year, has seen arrivals drop 50% this year, Sohan Seth Bhandari, president, Nashik District Onion Traders Association, said: ?Demand across the country for onions is around 60,000 tonne on a daily basis and supply is around 30,000 tonne, which means a shortfall of 50%. Retail rates will remain high for the next couple of months as there are no stocks left with traders.?
?Traders have almost emptied their stocks in June-July this year since they got good prices of R1,500-2,000 per quintal. Last year, prices were around R500-600 per quintal. Now, stocks are dwindling and therefore prices have gone up,? he added. Moreover, demand from Rajasthan, Bihar, Madhya Pradesh and Uttar Pradesh has increased due to low harvest and some of this onion is going to these states, Bhandari explained.
Dilip Bankar, chairman, Pimpalgaon Market Committee, said the situation will not improve unless new onion comes to the market. This should happen by September-October but, until then, consumers will have to pay higher prices, he said.
However, RP Gupta, director, NHRDF maintained that the stored stocks are sufficient to meet demand for next two months. About 10 lakh tonne of onion is available in storage and fresh arrivals have started coming into Bangalore, Kurnool and Hyderabad.
?I cannot say why prices are going up despite enough stocks. This could be an artificial creation,? Gupta said, hinting that speculators might be driving up prices. According to Gupta, fresh onion crop from Maharashtra would start coming from September 15.
Jayadutta Holkar, chairman, Lasalgaon market committee, pointed out that water scarcity last year had resulted in less plantation and, therefore, there is less crop. Holkar said some traders were taking advantage and were hiking prices. ?Farmers are not getting any benefits. If retail prices touch R70-80 per kg in cities, the government should intervene,? he said.