Onion prices on fire even with produce touching over decade high; here’s why

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Updated: December 12, 2019 2:24:35 PM

While onion production has been on a 12 year high in 2018-19, the prices, nonetheless, have skyrocketed and have breached Rs 200 per kg mark in some regions.

onion price hike, onion price rist, onion price in delhi today, onion price in west bengal, onion price in kolkataThere was a fall in production this year in which reflected in lower arrivals in September, October and November.

While onion production has been on a 12 year high in 2018-19, the prices, nonetheless, have skyrocketed and have breached Rs 200 per kg mark in some regions. Historically as well, “price increases have not been always in alignment with the production numbers as the latter are annual while there are three seasons for harvesting onions which affect monthly inflation rates,” CARE Ratings said in a report on Wednesday. This year, prices have been fueled by a gamut of factors. “Prices tend to increase sharply every time there is a crop failure which has been caused more often than not by a delayed withdrawal of the monsoon or flooding at the time of harvest when the kharif crop is damaged,” the report added. 

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There was a fall in production this year in which reflected in lower arrivals in September, October and November. The same can be attributed to delayed in Maharashtra region’s harvest due to prolonged monsoon, crop damage in Madhya Pradesh, Karnataka and Andhra Pradesh due to floods, and lower sowing by 7% in major onion producing states. The crop damage in Madhya Pradesh was to the extent of 58%; Karnataka to 18% and Andhra Pradesh to 2%, CARE Ratings cited reports as saying.

Onions are grown in three seasons across a year. First in October-December which typically contributes to 15% of output. Any failure in this produce results in a spike in prices. The second harvest is in January-March and 20% of total onion output comes from this produce and the third is March-May which is the majority of onion crop at 65%. The third crop called the rabi harvest is stored till the next kharif harvest. 

The great onion price hike has also caused CPI inflation number to inch towards the 5% mark with onions driving the majority of the vegetable prices. This has led to the government deploying various measures such as capping stock holding and importing onions from Egypt and Turkey.

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