Onion output weathers impact of erratic rain, retail prices wont hurt

Written by Sandip Das | New Delhi | Updated: Mar 14 2014, 10:32am hrs
Erratic rainfall in Maharashtra and Madhya Pradesh is unlikely to impact the country's onion output as a large chunk of the late kharif crop has already been harvested and the summer crop would be cleared by the middle of next month.

According to RP Gupta, MD of the Nasik-based National Horticultural Research and Development Foundation (NHDRF), about 5% to 10% of the crop would be impacted in key growing states of Maharashtra and Madhya Pradesh. As the contribution of late kharif crop is only around 20% of the total annual onion output, the impact would be minimal and would not affect the retail prices, Gupta told FE.

He said the summer crop, which constitutes about 60% of the total onion output, would be harvested only by next month. Arrivals in various mandis across the country have declined marginally in the last few days because of farmers stopping the harvesting of onion following the rains. However, it has not impacted the prices, Gupta said.

A trader from Nasik, the country's hub for onion trade, said wholesale prices of the crop are ruling in the range of Rs 700 to Rs 800 a quintal.

Wholesale onion prices were ruling in the range of Rs 800 to Rs 977 a quintal in key cities such as Delhi, Mumbai, Bangalore and Hyderabad on Tuesday. According to the department of consumer affairs, retail prices are reported in the range of Rs 15 to Rs 20 a kg in major cities.

The recent rains have had marginal impact on onion crops and the summer crop is expected to be bumper, CH Holkar, board member, Nafed, said. While onion crops in Madhya Pradesh and Rajasthan have been damaged marginally, crop prospects from other growing areas such as Rajasthan, Andhra Pradesh and Karnataka have been encouraging, Holkar said.

Unseasonal rainfall last week had damaged more than 6.7 lakh hectare of agricultural land in Maharashtra. At present, the state agriculture department is assessing the damage to cash crops such as grapes and pomegranate.

The government last week abolished the minimum exports price (MEP) of onion. In December 2013, the MEP was reduced to $150 per tonne. The government had imposed higher MEP on onion in September 2013 at $ 900 per tonne and then it was hiked to $ 1100 per tonne to curb exports and boost domestic supplies. Onion production has risen from below 5.5 million tonnes in 2002-03 to above 16 million tonne in the last three years.