After moderating for just one day, onion prices rebounded. In the past three days, the politically-sensitive commodity has surged up to Rs 250 a quintal in the wholesale market.
In the benchmark Lasalgaon (Maharashtra), prices shot up by Rs 250 to trade at Rs 1,825 a quintal on Friday. The surge was higher at Pimpalgaon, where the commodity swelled to Rs 1,820 a quintal on Friday from Rs 1,590 on Tuesday.
“There has been no change in fundamentals. After the initial discussion for a couple of days, and even threatening to levy the minimum export price (MEP), the government seems to have developed cold feet. The market rebounded based on existing fundamentals, which show the output to remain lower amid expectations of higher demand this year,” said a local trader.
In the Jodhpur mandi, onion was quoted at Rs 1,500 a quintal on Friday, a rise of 50 per cent from Tuesday. The commodity jumped a marginal Rs 55 in Gujarat’s Mahuva mandi to trade at Rs 1,350 a quintal on Friday.
This year, farmers could not cover the usual area for onion cultivation, due to deficient rainfall. National Horticulture Board (NHB) estimates onion output in 2011-12 at 16.34 million tonnes.
Ajay Kedia, managing director of Kedia Commodity, said, “Onion prices have climbed sharply by more than 60 per cent in the last one month, following the delay in arrival caused by drought, a worry for the government as it heads into state elections that have been known to turn on the cost of the vegetable.”