Bumper summer crop of onion likely, markets fear significant drop in prices

In many urban areas, onion prices had traded well above the Rs 100 per kg mark. India had imported 36,000 tonne of onions, of which around 18,500 tonne had arrived by mid January.

Meanwhile, the arrival of the late kharif crop (sown in October-November and harvested post January) had led to onion prices correcting sharply, both in wholesale and retail markets.

At Lasalgaon’s wholesale market in Niphad taluka of Nashik district, the average traded price of the bulb for February was Rs 1,982 per quintal as against Rs 3,455 in January. The kitchen staple is now trading at Rs 20-30 per kg at most urban markets of the country.

However, the bigger worry for markets is the imminent arrival of a bumper rabi crop. This crop, which is sown in December-January and harvested post March, is the only type that is amenable for storage. Farmers store their produce in dust proof and moisture proof structures on field called kanda chawls and offload the same till the arrival of the next crop in October.

As against the 5.20 lakh hectares of rabi onion reported last year, the country has reported 7.05 lakh hectares of sowing this year. Farmers in Maharashtra and other parts of the country have increased their onion acreage owing to better prices of the bulb. Good rain during the retreating monsoon also helped farmers to increase the acreage.

Suresh Deshmukh, a commission agent operating out of the Dindori wholesale market in Nashik, said a central team had visited Lasalgaon a few days back to take stock of the onion situation. “Exports will be opened up but if that happens now, there might be another price escalation. At present India is the only country to have onion and so there will be an immediate demand,” he said.

It might be recollected that the price escalation in the onion market was mostly due to failure of the rabi and kharif crop last year. Due to severe moisture stress, farmers in the state had failed to take the crop, which led to a shortage and pushed the prices up.

The ongoing export ban, traders said, would mean a collapse in onion prices once the rabi crop hits the market. BJP MP from Dindori, Dr Bharati Pawar, as well as the state government have written to the central government to lift the ban. With no indications of the ban being lifted soon, an imminent price crash is in the offing for onion in the state.