Trend expected to continue till supplies from Karnataka, Andhra Pradesh improve

There seems to be no immediate respite to consumers from high onion prices. After easing marginally in the past couple of weeks, onion prices are on the rise again.

Heavy rainfall in the South has affected the ongoing harvest in States such as Karnataka and Andhra Pradesh, resulting in lower market arrivals and prices soaring in consuming centres. In Delhi, the average wholesale price, which stood at Rs 3,700 a quintal in early September, rose to over Rs 4,432 on Friday, an increase of 20 per cent in the past two weeks. In Lasalgaon, the country’s largest onion market, the average wholesale price ruled higher than the Delhi market at Rs 4,550 a quintal on Friday.

At the retail level, the prices in Delhi, which hovered around Rs 55 a kg last week, have now crossed Rs 60.Trade sources expect prices to remain firm or increase in the near term until supplies from Karnataka and Andhra Pradesh improve or the main crop from Nashik arrives in early October.

“The stored onions have almost been exhausted and arrivals from Karnataka and Andhra Pradesh have been hit by the rains,” said C. B. Holkar, Director at National Agricultural Co-operative Federation of India. The current crop in Karnataka is bigger at around 4.5 lakh tonnes, while in Andhra, it is around 3 lakh tonnes. Daily arrivals in Bangalore, the key southern market, have declined by about a third from the previous week to about 3,822 tonnes on Friday. Also, the arrivals have dropped in other markets such as Hubli, Belgaum, Kurnool and Pune.

“Though private traders have imported from China 10-15 containers (around 500-550 tonnes), which are reportedly awaiting clearance at Mumbai and Chennai ports, it will not make any difference to prices,” sources said.

India exported 6.39 lakh tonnes of onion during April-July of this fiscal, compared with 6.94 lakh tonnes in the corresponding period last year. Onion production stood at 16.6 million tonnes in 2012-13, which was lower than in the previous year.

(This article was published on September 15, 2013)
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