Onion trades at output cost as prices decline 25%, may deter Kharif sowing

The sharp decline in onion prices ahead of the kharif sowing season has disappointed farmers at large.
The price of onion has declined 25 per cent in the last two weeks and it is currently trading around the cost of production. The price decline may deter farmers from sowing this politically crucial vegetable in the upcoming kharif season.

In the benchmark Lasalgaon wholesale mandi in Maharashtra's Nashik district, onion was quoted at Rs 7.40 a kg on Tuesday, as against Rs 9.50 a kg on June 10. Onion arrivals during this period, however, plunged to 1,600 tonne (as of Tuesday);  arrivals of June 10 were 2,333 tonne. Some farmers were forced to sell their produce for as low as Rs 4 a kg.

The sharp decline in the onion price ahead of the kharif sowing season has disappointed farmers. Most horticulture farmers in the state have suffered massive losses so far this year, first because of the Covid-19-triggered supply chain disruption and lockdown, then labour exodus, and most recently damage to mature crop from Cyclone Nisarga in parts of Maharashtra. 
“The quality of onion is very poor due to delay in harvesting following the shortage of labourers and problems in transportation. Many farmers left matured onion crop unharvested during the lockdown period,” said Narendra Wadhwane, secretary, Agricultural Produce Market Committee (APMC), Lasalgaon.


Farmers in and around Lasalgaon, Niphad, and other major onion growing regions in Nashik, however, are still planning to continue sowing this crop on hopes of a revival in its price in coming months.

Thousands of farmers across the Nashik district are fully dependent on onion cultivation. The district alone contributes nearly 16 per cent of India’s annual onion output of around 23 million tonne which is divided into three cycles — the early kharif (15 per cent), seasonal kharif (70 per cent), and late kharif (15 per cent) seasons.
“Seeds are adequately available this season as well. While monsoon rainfall has not yet started in the district, farmers have begun sowing of onion seeds in irrigated land for saplings that can be later re-planted with the onset of showers for seasonal crops. Nashik farmers have very limited choice for crop shifting. Normally, farmers sow onion on hopes for a revival in prices next year,” said Hansraj Patil, an onion farmer in Niphad near Lasalgaon.

In retail,  onion is currently being sold at Rs 15 a kg, a decline of 40 per cent from its price of Rs 25 a kg until two weeks ago.

Barely six months ago in December 2019, onion was quoted at Rs  70-80 a kg in wholesale and Rs 140-150 a kg in retail, which invited tough actions like the imposition of stock limit and a ban on its exports to bring down its prices to an affordable level.

There is a huge disappointment among farmers ahead of sowing season as the current price does not yield even the cost of production which some farmers quote at Rs 8 a kg.

“There is no export order. Farmers are bringing in the stored onion to create space for the next season crop and also fetch some money to buy seeds and fertiliser,” said Santosh Patil, chairman, APMC, Sangli.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel