Even as the onion markets in Maharashtra witness heavy arrivals, prices have shot up to over Rs 3,000 per quintal owing to increased demand from other states. In Lasalgaon, the country’s largest wholesale market for the bulb, modal prices touched Rs 3,300 per quintal on arrivals of 20,700 quintals. A day earlier, modal prices were Rs 3,251 per quintal and arrivals were to the tune of 22,230 quintals while arrivals had touched 25,158 quintals a couple of days earlier with prices crossing Rs 3,400 per quintal mark. Excessive rains have been reported in onion-growing states such as Gujarat, Madhya Pradesh, Karnataka and West Bengal. Experts predict a price correction by February. Traders are calling it the Ockhi effect. According to Jaydutt Holkar, chairman , Lasalgaon Agriculture Produce Market Committee, farmers are getting good prices although the arrivals are heavy. In the past, prices were low during this period on heavy arrivals and there have been agitations but this season, there is a shortage of supplies in other states because of the cyclone and therefore farmers are getting a good price, he said.
Increased demand has been reported from Gujarat, Rajasthan, Karnataka, Madhya Pradesh and Telangana. Presently, the onions arriving in the wholesale onion markets of the district are of the kharif crop. The supply had increased to 20,000 quintals a day at Lasalgaon in the past week. Since December 8, onion prices have crossed `3,000 per quintal mark. Manoj Jain, an onion trader from Lasalgaon says there has not been much supply in the market because the crop in Gujarat and Rajasthan has been affected due to the recent cyclone. Therefore, prices are above Rs 3,000 per quintal and these should start cooling off next week onwards, he said.
Onion prices had begun rising post Diwali on short supply and pressure caused by demand from the southern states. Prices were then in the range of `2,500 per quintal and traders had hiked prices to Rs 3,000 per quintal for better quality onions, industry people said.
This period, the highest rate of the season was seen in the Lasalgaon APMC market at around `40 per kg. Earlier, rates were expected to be in the high range till the first week of December and then drop down but this has not happened because of the rains in other states. “Presently, the market is being supplied with both the stored summer variety and the freshly harvested red variety. Both these crops are competing for prices,” said Holkar. Unseasonal rains and thunderstorms during the last three months have taken a toll on the red onion crop which was expected to hit markets by now. The rains delayed harvesting which had led to the short supply. There has been almost 30% drop in kharif onion acreage in Maharashtra and Karnataka, two major onion-growing states. In Karnataka, 2017-18 kharif onion acreage is around 21% less than last year, while in Maharashtra, the area is around 32% less. Onion is cultivated usually thrice in a year. The biggest is the rabi crop, sown in December and January and harvested around April-May. This crop contributes over 60% to the total output.
As it is storable, it sustains the country’s onion demand till the kharif harvest comes around October-November. In 2014-15, India produced 18.9 million tonnes of onion which rose to 20.9 million tonnes in 2015-16 and further to 21.7 million tonne in 2016-17. The price this year started firming up as the kharif harvest got delayed due to low acreage, so it is being speculated that it could stay at an elevated level for a few more days, unless a fresh crop starts coming in the next few weeks from Rajasthan and Madhya Pradesh, as there is simply no supply at present. The late kharif onion crop is sown around August and September and harvested around January and February. The Centre decided to import onions and has already placed an order for 2,000 tonnes. But, as officials said, imported onions come in cold containers and it takes almost a month for them to be brought to a moderate temperature, else the consignment gets damaged.
The government also imposed a hefty Minimum Export Price (MEP) of $850 per tonne (around Rs 54 per kg) on November 23 to cool prices. This brought down imports — from a daily import of around 3,000-4,000 tonnes since November 23, the imports trickled down to less than 150 tonnes a day and is projected to go down further in the coming days.