Onion prices have been relatively stable of late, thanks to adequate stocks from the summer harvest and high minimum export prices which discouraged exports. That may be about to change.
Prices are expected to start rising in a month over fears of lower output due to deficient rains and delayed kharif crop arrivals at various markets in India’s key onion-producing states of Maharashtra and Gujarat.
Kharif crop, which usually enters the market by the last week of October, is expected to arrive only by end-November or mid-December, reducing supplies and pushing up prices. Traders from Nashik, India’s onion hub said that currently, demand is met with stocks from the summer crop, which would run out in the next few weeks.
In Maharashtra, onions currently cost Rs 800-950 per quintal in the wholesale markets, compared with last year’s R1,300-R1,350.
Nasik-based National Horticultural Research and Development Foundation in its latest crop prospect report said: ?The harvest of kharif crop in Karnataka, Andhra Pradesh and Maharashtra has started and transplanting of late kharif crop in Maharashtra, Gujarat and Madhya Pradesh has been completed. Overall, the area under kharif onion is going to be less by 15-20% compared to last year.?
?The exports curb and consequent poor realisation for farmers are going to hit next year’s summer crop sowing,?warned CB Holkar, board member, National Agricultural Cooperative Marketing Federation of India.
Holkar added once the summer crop get exhausted, reduced onion kharif acreage would push up prices in the next few weeks.
The ban on onion exports was lifted on September 20, but the move came with a hefty minimum export price (MEP) of $475 per tonne. This has discouraged exports from India, since onions from Pakistan and China cost $350-375 per tonne in the international market.
Retail onion prices in Delhi had shot up to R85 a kg in the last week of December, 2010, forcing the government to first suspend export and later prohibit it. India’s 2011-12 onion output is estimated at over 13 million tonnes. Out of this, Maharashtra produces over 40%.