After a tense few months when onion prices had skyrocketed resulting in imports, wholesale markets across the country are now being flooded with the commodity ahead of the festive season. Prices have fallen to Rs 2,300 per quintal at Lasalgaon due to oversupply.
Fearing further fall in prices, farmers as well as traders have sought a reduction in the minimum export price (MEP) of onion.
Around 6,500 quintals of onions arrived in the market with prices averaging at Rs 2,315 per quintal. On Tuesday 5,984 quintals arrived in the market and modal prices touched Rs 2,300.
According to Nanasaheb Patil, chairman of Lasalgaon APMC, prices are expected to fall further since arrivals are on the rise. Arrivals are now touching 15,000 quintals in some of the markets such as Umrana in Nashik, he said. A couple of weeks ago, the arrivals were meagre around 1,200-1,500 quintals.
The increase in arrivals of onions is because of one time plantation resulting in one time harvesting, Patil said.
“Traditionally, demand for onion is low in Diwali. Onion sowing was also delayed due to late rains. When good rainfall was received during Ganesha festival, majority of the farmers completed sowing operations. This time, most farmers will bring their crop to the market from November 15 onwards and therefore prices will fall drastically to around R700 per quintal. Daily arrivals in all the 14 markets of Nashik is expected to touch 2 lakh to 2.5 lakh quintals,” he said.
Moreover the red onion (kharif crop) variety cannot be stored and the only way to avoid a glut is to export it. Hence the MEP should be lowered, Patil said in a letter to Prime Minister Narendra Modi, Union agriculture minister Radhamohan Singh and Maharashtra chief minister Devendra Fadnavis. The present MEP is $700.
The government had increased MEP when onions were in short supply.
Patil said exporters and traders were also demanding concessions from the government because of the oversupply. India exported 12.38 lakh tonnes (LT) of onions in 2014-15 and 14.03 LT in the preceding fiscal, with these valued at Rs 2,300.54 crore and Rs 3,177.29 crore, respectively. In the first two months (April-May) of this fiscal, 2.36 LT of the bulb worth Rs 444.80 crore were exported.
RP Gupta, director, National Horticultural Research and Development Foundation (NHRDF), modal prices have already fallen below Rs 30 per kg but the effect is not being seen in retail markets yet. There could be a futher reduction in prices after Diwali when arrivals begin increasing, he said. Since the demand is huge, this onion directly goes out to markets and moreover the shelf life is lower, he said.
Interestingly, the state-run trading corporation had contracted imports of 2,000 tonnes of onion last month as it was asked to by the Centre after retail prices of the vegetable skyrocketed in August.
According to the NHRDF, India produced 193.53 lakh tonnes of onions in 2014-15, higher than its previous estimate of around 189 lakh tonnes and closer to the 194.02 lakh tonnes produced the year before. Maharashtra, Gujarat, Rajasthan, Andhra Pradesh and Madhya Pradesh are main kharif growing states.