Onion prices surge over doubtful supply, drought

Last Updated: Thu, Jul 18, 2013 02:55 hrs

Mumbai: Onion prices have shot up in the past two weeks on supply shortage due to alleged cartelisation by large stockists near major mandis. Data compiled by the National Horticulture Research and Development Federation (NHRDF) shows prices have jumped by up to 60 per cent this month. A rise of another 30-40 per cent cannot be ruled out.

In the benchmark Lasalgaon market in Maharashtra (onions go from the state to all over the country), export quality onion was quoted at Rs 2,410 a quintal Wednesday morning, a rise of 42.6 per cent from Rs 1,690 a quintal on July 1. In Delhi, where its price has been a politically sensitive issue, it was sold at Rs 2,025 a quintal on Wednesday morning, a rise of 30.7 per cent from July 1.

The spurt has translated in the retail market to Rs 34-38 a kg across the country. “This is the first time that onion prices have been raised exorbitantly in July. Generally, it goes up in September, ahead of the festival (Durga Pooja and Diwali) demand. Stockists are releasing the quantity very slowly. While new season crop has started arriving in Andhra Pradesh mandis, this would not be of any major impact on prices,” said R P Gupta, Director, NHRDF.

High prices are here to stay for at least one more month, as the new supply from Andhra to the tune of 900-1,000 tonnes isn’t going to make mjuch of a difference. The new crop from Karnataka is set to hit the market in August.

“There is no dearth of supply. And, hence, no need to push panic buttons,” said Gupta.

Apparently, supply has steadily evaporated. In Agra, for example, total arrivals in the mandi plunged by 44.5 per cent to 1,470 qtl on July 17 from 2,650 qtl on July 1. In the Ahmedabad and Pimpalgaon mandis, arrivals have declined by 45.2 per cent and 58.1 per cent to 3,730 qtl and 7,500 qtl, respectively.

“Farmers faced the biggest hurdles last year in irrigating the onion crop in Maharashtra due to lower rainfall during the previous season. To protect the crop, farmers irrigated the crop by procuring water from long distances. This cost more and unavailability of tankers in time resulted in crop damage. Consequently, very little quantity was left with stockists from last year. Since the new crop from Karnataka is a month away, consumers will have to bear the brunt of higher prices until then,” said Sanjay Sanap, owner, Shivkrupad Traders, a Nashik- based trader.

According to a Mumbai-based exporter, demand has also fallen in West Asia, Malaysia and other ususal destinations. Some demand has been reported only from Colombo, Sri Lanka.

The market would stabilise gradually to the normal level of Rs 10-12 a kg after October, said Atul Shah, director, Agricultural Produce Market Committee at Pimpalgaon.

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