Traders attribute the sudden spurt in prices to the very little quantity from last year’s production, crop damage due to unseasonal rain across the country and unfavourable government policy.
“Rain during October and November have so far resulted in widespread damage of the standing kharif crop. Thus, arrivals of early variety onion
sown in South Indian states, including in Andhra Pradesh and Karnataka, were damaged. So, supply of new variety of onion, which was supposed to hit mandis in the second fortnight of October, is no longer available. Thus, onion prices
are continuously rising,” said Jaydatta Holkar, chairman, APMC Lasalgaon.
Meanwhile, after banning onion exports and levying stock limit for domestic traders last month, the department of consumer affairs had convened a meeting of stakeholders last Friday. It concluded that the price increase was due to rain-driven supply disruption which has started improving in order to correct prices.
In fact, total onion arrivals in Lasalgaon mandi fell to a mere 20 tonnes, the lowest in several years, on Saturday, but recovered marginally to 180 tonnes. Surprisingly, three months ago, onion supply was hovering around 2,356 tonnes on August 2.
“The October rain damaged the entire kharif crop. Now, farmers have started sowing onion afresh which would be available for harvesting in February. Hence, the new supply would come to the mandi only in February. Since very little quantity of last season’s crop is left with farmers and stockists, onion prices
are set to rise further. Consumers would have to bear with the high onion prices
till January-end,” said Sanjay Sanap, a large onion wholesaler in Nashik district of Maharashtra.
The third advanced estimate from the ministry of agriculture says that India’s onion output was 23.49 million tonnes for 2018-19 compared to 23.26 million in the previous year.