Soaring onion prices bring tears across the country

After tomatoes, it is now onions that are exposing the Government’s inability to dampen extreme price fluctuations in the vegetable market.

Onion prices at Lasalgaon in Nashik, country’s main onion producing region in Maharashtra, hit a record Rs 50 a kg in after-market hours, while the modal price (that is, the rate at which most trades took place) zoomed to a record Rs 4,300 a quintal. Onion prices have surged more than four-fold this year.

The rise in prices is despite increased arrivals at major markets of Bangalore, Kolkata, Pune, Pimpalgaon and Lasalgaon. The trend has baffled not only buyers but also the Government, even as the trade attributed it to low stocks amidst high demand. In Delhi, the retail prices ruled between Rs 50 and Rs 70 a kg. This time around, the price rise is not just in the consuming centres, but also across markets in the producing regions of Maharashtra, clearly indicating speculation at play, over and above supply side issues.

Onion prices tend to fluctuate seasonally, with a spike during the monsoon season when supply is low. However, this year, average wholesale prices — ranging from Rs 4,781 a quintal in Delhi to a high of Rs 5,800 in Chennai (as of August 12) — are more than four times the prevailing price on the same date last year. Last year, onion sold for Rs 669 a quintal in Delhi and at Rs 1,100 in Chennai.

Whether the rising prices will become a poll issue ahead of the Assembly elections in major consuming States such as Delhi, Madhya Pradesh and Rajasthan remains to be seen. “The existing stocks are low and the new crop is at least two months away,” said a trader and exporter in Nashik. According to sources in Nashik, a traders’ cartel is involved in driving up the prices. With no control over the market, no one is able to guess what is happening, they say.

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