Over the past two weeks, there has been a significant surge in the average wholesale prices of onions at the Lasalgaon Agricultural Produce Market Committee (APMC) in Maharashtra, with a substantial 60% increase. In the past week alone, prices have risen by 18%. In certain markets in Maharashtra and Delhi, the maximum price for top-quality onions reached Rs 50/kg. This upward price trend is expected to persist until December when the new kharif crop is anticipated to enter the market after a delay of nearly two months.
Nandkumar Shirke, the chairman of the Association of Onion Traders in Ahmednagar District, reported a rise in the average onion price in the Ahmednagar market, from around Rs 35/kg about ten days ago to Rs 45/kg currently. Wholesale prices in most of Maharashtra’s onion-growing districts now range between Rs 45-48/kg.
On Tuesday, the average onion price at the Lasalgaon market was Rs 38/kg, marking a steep 58% increase from Rs 24/kg a fortnight ago on October 10.
To curb the rising prices, the central government imposed a 40% duty on onion exports on August 25, which coincided with the price hike due to delayed and reduced sowing of the kharif crop. Additionally, the government began selling onions purchased by the National Agricultural Cooperative Marketing Federation of India (NAFED) in wholesale markets at rates lower than the prevailing market prices.
The primary factor contributing to the escalating onion prices is the dwindling arrivals of onions in the markets. Over the past fortnight, the influx of stored onions has decreased by approximately 40%, dropping from around 400 vehicles per day, each with a 10-tonne capacity, to roughly 250 vehicles. Prices are anticipated to remain stable as the arrival of new red onions from the kharif season is expected to be delayed by approximately two months, according to Shirke.
Senior trade sources point out that low sowing of kharif onions in the southern states of Karnataka and Andhra Pradesh is due to farmers incurring losses over the last two years. Below-average rainfall in these states has further hampered onion production. The country’s next kharif onion harvest is now expected to come from Alwar in Rajasthan. However, even in Rajasthan, the anticipated crop is less than 40%, according to an anonymous trader.