With arrivals of the fresh kharif crops, the average mandi prices of onions at Lasalgaon, Nashik, Maharashtra, the hub of the country’s wholesale trade has declined by 50% to Rs 2000/quintal on Sunday from Rs 4000/quintal prevailed in the last one month.
Traders said that as the kharif harvest of onion can’t be stocked because of higher moisture content, the prices would continue to decline if the government does not remove 20% export duty on the vegetable to boost shipment.
“The increasing arrival of onions in the wholesale markets across major producing states like Maharashtra, Madhya Pradesh and Gujarat has lead to fall in mandi prices while the withdrawal of exports duty may boost demand and prices,” Jaydutt Holkar, director, agricultural produce market committee (APMC), Lasalgaon, Nashik, told FE.
Trade sources said that cost of production of onion is around Rs 1700 – Rs 1800/quintal while farmers start incurring losses if mandi prices fall below this.
According to the department of consumer affairs, the modal retails prices of key kitchen staple has declined to Rs 40/kg from Rs 60/kg prevailed a month back.
Officials said that the retail prices are still on the higher side to initiate a cut on export duty. However trade sources said that with robust arrivals of kharif crops across key producing states retail prices are expected to soften further over the next couple of weeks.
Earlier in the week, Ajit Pawar, deputy chief minister, Maharashtra in a communication to commerce minister Piyush Goyal has requested removal of 20% export duty on onion because of sharp fall in price due to fresh arrivals.
“If we remove the 20% export duty on onions, the farmers can have a sigh of relief with some of their losses being recovered because of fall in prices,” Pawar stated.In September, the government had reduced the duty on onion export to 20% from 40%.
Retail inflation in onion in November was 5.59% on year because of high base effect. Inflation in onions in November, 2023 was 86% on year.
“Good and timely monsoon rains this year have provided a big boost for kharif crops, including onion and other horticultural crop like tomato and potato”, according to an official note. The area under Kharif onion this year is projected at 0.36 million hectare, 27% higher than previous year.
According to the agriculture ministry, output of onion in the 2023-24 crop year (July-June) is estimated at 24.21 million tonne (MT), a decrease of 20% compared to previous year because of a drop in rabi output.
Kharif onion has a share of around 20% of the total onion output. Rabi onion, with around 60% share in output harvested in March, are stored and released in calibrated manner for meet rising demand.