Agri Business

Excessive hoarding by farmers hammers onion prices

| Updated on: Oct 04, 2012
image caption

Higher production in Rajasthan, M.P. adds to growers’ woes

Onion farmers in the Lasalgaon market, Asia’s largest, are crying copiously.

Wholesale prices have dipped as low as Rs 3 for a kg and most have resorted to distress sales, so as to liquidate their stocks.

Currently, prices range between Rs 300 and Rs 600 a quintal (100 kg), while in June, the average wholesale prices were around Rs 800.

Changdev Holkar, Board member of the National Agricultural Cooperative Marketing Federation of India, told Business Line that prices have taken a hit due to hoarding by farmers in May.

Beginning to rot

Usually, farmers hold back onion grown during rabi season as it has a longer shelf life. But this time, they have held back more quantity expecting prices to rule higher during July-August.

He said that almost 15 per cent of stocked onions have started to rot, pushing farmers to liquidate their stocks.

Holkar said that the bearish trend would remain for a couple of months.

On the other hand, he said that since the kharif crop has already been delayed due to delayed monsoon, prices could increase, with the crop reaching the market only by December.

He said that a sharp decline in wholesale prices had not resulted in a reduction in retail prices. Traders continue to make money, not passing on the resultant decline to the end-consumer, he said.

Last few years, due to the remunerative price, farmers in Rajasthan and Madhya Pradesh (M.P.) have also taken up onion cultivation in a big way.

R.P. Gupta, Director of the National Horticultural Research and Development Foundation, said that traders were not keen on buying onions from Nashik, since M.P. too had a good crop.

Due to the glut in Maharashtra, some farmers have not planted kharif onions and instead, opted for other crops, he said.

Ajay Agarwal, onion trader from Bhopal, said that this year, farmers from areas such as Khandwa and Shajapur had managed to produce a bumper crop.


Published on October 04, 2012

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