Onion prices have dropped to a five-month low in markets near growing centres in Maharashtra and other States with the doubling of kharif onion arrivals.

The decline in prices in these primary markets has begun to reflect in markets across the country, including retail outlets.

During the weekend, the modal price or the rate at which most trades took place at Lasalgaon Agricultural Produce Marketing Committee yard dropped to Rs 1,700 a quintal.

After ruling at Rs 1,690 a quintal on July 1, onion prices soared to a record high of Rs 5,500 a quintal at Lasalgaon on September 17 as rains affected the kharif crop in Andhra Pradesh, Karnataka and Maharashtra.

Currently, prices in Delhi retail outlets are Rs 46 a kg and Rs 62 in Mumbai.

According to the National Horticulture Research and Development Foundation data, daily arrivals across the country had increased to 15,000 tonnes on November 29 against 7,500 tonnes on November 1.

“Arrivals of kharif onion have begun to rise. In fact, now there could be complaint of low prices from farmers as prices may drop below Rs 1,000 a quintal,” said R.P. Gupta, Director of the National Horticulture Research and Development Foundation.

“Prices will now come under pressure since arrivals of late kharif onion will begin towards the middle of this month. The late kharif onion crop is good,” said C.B. Holkar, Director at the National Agricultural Cooperative Marketing Federation.

“If the weather continues to hold good, arrivals will flood the markets,” said Gupta.

“There is surplus in both kharif crops,” said Madan Prakash, Director of Chennai-based Rajathi Group of Companies, that exports onion.

In view of the fall in prices, the Agriculture Ministry has asked the Centre to lower the minimum export price (MEP) for onion that is currently $1,150. The floor price for export was raised from $900 on November 1 to curb shipments of onion as part of the Government efforts to bring down prices.

Prices at retail levels had surged to as high as Rs 100 a kg and have ruled above Rs 50 during August-November.

“The Centre may lower the MEP after the Assembly elections to five States get over on December 4. Parliament begins on December 5 and, hopefully, by December 15, the MEP will be lowered,” said Holkar.

“It will be good for all if the MEP is reduced since we are outpriced in the global market,” said Prakash.

According to Holkar, there is good demand for Indian market in West Asia, Malaysia, Singapore and Sri Lanka.

“No other country can match the sort of taste our onion has,” he said.

The Centre may have to cut the MEP sharply since the rabi onion crop that will arrive after May is also likely to be good.

“Currently, transplanting of rabi onion is on. It is good,” said Holkar.

“Planting of rabi crop is good. More importantly, the late kharif onion will be even better than early kharif,” said Gupta.

Onion is grown as kharif, late kharif and rabi crop in various parts of the country. While kharif and late kharif have a lower shelf life, the rabi crop, which has to last until the arrival of kharif in late September or early October, has a larger shelf life.

Onion production in the 2012-13 season ending June dropped to 16.30 million tonnes against 17.5 mt in 2011-12.