Close on the heels of the spike in tomato prices, onion, another staple vegetable, has turned dearer. After a prolonged spell of decline, onion prices have risen in most parts of the country in the last one month and may spike further. Delay in kharif sowing caused by late onset of monsoon and a likely fall in area under cultivation have adversely affected supplies already, and the crunch may escalate by December, trade sources said.
Traders and farmers from Maharashtra say the stocks are currently adequate in the state, and may suffice to meet demand for the next 3 months. However with the possibility of lower area under the kharif crops, supply could be hit by December and prices are likely to go up, they added.
“Kharif sowing is likely to be hit and could result in spik in prices by beginning of winter months,” Balasaheb Misal, former director, Manmard (Maharashtra) mandi board and an onion farmer said. Farmers have not received remunerative prices by growing onions since last one year, he added.
“Kharif sowing so far has been sluggish, the farmers could shift to other crops this season as income from onions have declined because of robust production,” Joydutt Holkar, member, APMC mandi, Vashi, Navi Mumbai, said.
Currently the benchmark prices at Lasalgaon, Maharashtra, the hub of the country’s onion trade is in the range of Rs 800 – 900 / quintal which is at the same level since last one year.
However, according to the department of consumer affairs data, there has been a significant spike in average retail onion prices across all the five regions in the last one month. Although retail prices have declined compared to previous year. In May 2023, retail onion inflation was down 5.48% on year. However, the inflation for kitchen bulbs had declined in double digit numbers during May, 2023-April, 2022.
At present, the government has 0.14 million tonne (MT) onion stock which was purchased from the farmers a couple of months back. The government had procured 0.25 MT of onion for the buffer stock in 2022-23 against 0.2 mt purchased in the previous year.
The onion stock was procured through farmers’ cooperative NAFED from farmers of Maharashtra, Gujarat and Madhya Pradesh.
Since the beginning of 2021, the government has not imposed a ban on onion exports which was the norm a few years back.
“The extant export policy of onions is free and only the export of onion seed is ‘restricted’ and that too is permitted under authorisation from DGFT,” the commerce ministry has stated.
The estimated production of onion during the 2022-23 crop year (July-June) is 31.01 MT against 31.7 MT reported in the previous year. The output of kitchen bulbs was 26.64 MT in 2020-21.India is the biggest producer of onion and Maharashtra, Madhya Pradesh, Karnataka and Gujarat have more than 80% share in the country’s production.
Rabi onion harvested during April – June accounts for around 65% of the country’s onion production and meets the consumer’s demand till the kharif crop is harvested from October-November. Kharif harvested onions are not stored because of higher moisture content thus entering the market directly.