Onion prices likely to soar as arrivals decline

Onion prices are likely to soar as the season of red onion comes to an end and the arrival of summer onion in the market is slow.

Arrivals of the bulb crop to Asia’s largest onion market, Lasalgaon, is almost halved. From an average daily inflow of 22,000-25,000 quintals, it has come down to 11,978 quintals on Monday. The modal price is hovering around ₹3,500 per quintal compared to ₹2,651 in January-end. The average retail rate in the major Maharashtra markets is about ₹50-60 per kg.

“Unseasonal rains have damaged onions. Many onion growing areas witnessed heavy rains in January second week and farmers suffered losses. However, there is good availability of onion this season and the shortage will not continue beyond 15-20 days,” Bharat Dighole, President of the Maharashtra State Onion Growers’ Association, told BusinessLine.

According to farmers and traders, late kharif produce is coming to the market and this stock will end soon. The situation will remain the same till new summer crop hits the market in 2-3weeks.

Some farmers say that unavailability of seeds during sowing season in December has affected the production.

In October last year, the average onion price at Lasalgaon had touched ₹5,000 per quintal as the supply of good quality onion dipped. However, since then prices declined with the Centre’s intervention to import onion and ban export. The modal price of red onion was ₹1,800 in Lasalgaon in December, while that of summer onion had dropped to ₹1,400 per quintal.

Indian onions has two crop cycles, first harvesting starts in November to January and the second harvesting from January to May.

No major export

The Central government lifted the export ban on all varieties of onions with effect from January 1, 2021.

“However, exports has not gained momentum. There is good demand for onion in the domestic market and hence traders are keen to sell the produce here. Also, the unseasonal rains have affected the quality of onions,” said Nitin Jain, a Nashik-based trader.

He added that Indian onion has demand in the global market but as domestic demand is on the rise, traders would prefer local markets over international markets.

According to Apeda data between April and November 2020-21 India exported over 13,10,680.80 tonnes of the bulb worth ₹2,138 crore.