With increase in arrival of late kharif onions in various mandis across Nashik during the last few weeks, prices of onions have dropped to a record low of Rs 400 per quintal forcing the traders and farmers to close down the markets.

After reaching a record high of Rs 3,500 per quintal in last week of December 2010, prices fallen sharply mainly because of arrival of late kharif crops.

Farmers have been demanding atleast Rs 1,000 per quintal for their produce or else are demanding lifting of export ban of onion which was imposed by the government since December last year.

A trader from Nashik, the hub of country’s onion trade told FE that business has stopped at the Lasalgaon market?the largest onion market in the country.

With increase in late kharif arrival the retail price of onions has softened during the last few weeks. According to department of consumer affairs data, in Delhi the retail price dropped to Rs 21 a kg on Thursday from Rs 57 per kg prevailed just a month back.

Similarly, price in Mumbai declined to Rs 21 from Rs 63 during same period. In most of the metros, the retail prices have dropped below Rs 25 a kg while in case of Bangalore and Chennai, the prices are at Rs 19 per kg and Rs 18 per kg, respectively.

The government has taken several measures to rein in prices of the key agricultural commodity when it skyrocketed in December 2010. These included ban on exports and abolition of import duty. India had banned exports of onion in December to tame high inflation which was mainly driven by high prices of vegetable and fruit.

Meanwhile, commerce minister Anand Sharma on Friday said he was not in a position to provide a timeline for lifting an export ban on onions.

On plummeting onion prices across mandis in Nasik, agriculture minister Sharad Pawar on Wednesday said the onion production would be less this year compared with last year, but still the output would be sufficient to meet the country’s requirement. “A situation may arise that onion export could be allowed with some cap on quantity,” he said

The latest crop prospect reports by NHDRF said the harvesting of kharif onion over and late kharif crop started from mid January 2011 and will continue till mid of March 2011. Present crop condition is medium to good. ?The arrivals of onion from late kharif in Maharashtra and Gujarat increased in the markets,? the report said.

Maharashtra is the biggest onion producer in the country. In December, because of huge jump in onion price because of kharif crop failure had pushed up food inflation to one-year peak, resulting in criticism against a government.