Rise in output, storage keep onion prices in check | The Financial Express

Rise in output, storage keep onion prices in check

India exported 1.5 MT of onion valued at $468 million in 2021-22.

Rise in output, storage keep onion prices in check
Close to a million tonne of onion worth of $208 million has been exported during April-August of the current fiscal (2022-23). (IE)

Onion prices have remained stable in the last two years thanks to the rise in onion production and an improvement in storage facilities at the farmers’ level.

The usual seasonal spike in prices of onion, a political hot potato, especially during October-November, has not been witnessed in the past two years as there have been adequate supplies.

“Storage of rabi onion at the farm level has improved in the last couple of years and production has increased too,” Balasaheb Misal, former director, Manmard (Maharashtra) mandi board and an onion farmer, told FE.

Currently, mandi prices in Lasalgaon, Nasik, Maharashtra, the hub of onion trade, is ruling around Rs 12-14/kg against Rs 22-23/kg a year ago.

Also read: Now bite-sized combo offer on insurance, too

According to the department of consumer affairs, the modal retail price of onion is currently around Rs 28/kg against Rs 40/kg a year ago.

Onion price inflation was down 20.5% on year in October 2022.

As per the seasonality pattern, rabi onion is harvested during April-June, which accounts for around 65% of the country’s onion production and meets the consumers’ demand till the kharif crop is harvested in October-November. Kharif onions are not stored because of a higher moisture content, thus entering the market directly.

According to the third advance estimates of horticultural crops production for the 2021-22 crop year (July-June) released last month, the production of onion rose by 17% to 31.2 million tonne (MT) in 2021-22 against 26.6 MT reported in the previous year.

According to rating agency Crisil, the rabi onion harvest was 20 MT for 2021-22 season, which was an increase of 17% from the previous year. The agency has predicted a moderate price rise of 4-5% in onion prices till December 2022.

In December 2019, retail onion prices touched Rs 100 a kg in many cities, resulting in the government’s ban on onion exports. An official said since January 2021, there has not been any ban on onion exports as used to be a few years back.

India exported 1.5 MT of onion valued at $468 million in 2021-22. Bangladesh and Malaysia had 46% and 12% share, respectively, in total onion exports in the last fiscal.

Close to a million tonne of onion worth of $208 million has been exported during April-August of the current fiscal (2022-23).

Also read: Results of post-2019 investments in Jammu and Kashmir to be visible by next year: Official

“Besides focussing on traditional countries such as Bangladesh, Malaysia and the UAE, we are aiming at expanding onion exports to non-traditional markets such as Indonesia,” M Angamuthu, chairman, Agricultural and Processed Food Products Exports Development Authority (APEDA), said.

He said the financial assistance is being provided to onion exporters for building required infrastructure for boosting exports. Also, APEDA has formed the Onion Export Promotion Forum, which has representatives from concerned ministries, exporters, state agriculture department, Research Institute, etc.

Maharashtra, Madhya Pradesh, Karnataka and Gujarat contribute 75% of the country’s onion production.

To curb any possibility of spike in prices, the farmers’ cooperative Nafed had procured 0.25 MT of rabi onion in the 2021-22 season (July-June) for creating a buffer stock which was currently released in the market.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

First published on: 29-11-2022 at 02:45 IST