Onion prices continued their south-bound journey this week as arrivals flooded markets in Maharashtra and Gujarat.
“We are seeing huge arrivals in almost all terminal markets in Maharashtra now. On Friday, over 1,600 tonnes arrived at Lasalgaon, whereas at Umrane arrivals were about 1,500 tonnes,” said Mr Rupesh Jaju, Director of Nashik-based United Pacific Agro Pvt Ltd.
The modal price or rates at which most trades took place slid to Rs 625 a quintal from Rs 925 last week.
“Quality onions are fetching about Rs 850 a quintal but the average price is Rs 500-600 a quintal,” Mr Jaju said.
In Gondal Agricultural Produce Marketing Committee yard, onion was quoted at Rs 180 for a maund of 20 kg. “Arrivals were high at 20 truckloads (12-14 tonnes each). This affected the sentiment, though demand was good,” said Mr Hirenbhai Patel, a trader.
Though domestic demand existed, it did little to stop prices from dropping further.
“The issue is that kharif onion cannot be stored. Farmers can hold it for at the most 20 days. As they are trying to sell, markets are flooded,” said Mr Jaju.
The situation has not improved despite the Centre lifting the ban on onion exports imposed in December after prices crashed to around Rs 500 a quintal.
“The floor price of $600 a tonne fixed by the Centre for exports is proving to be a hurdle,” said Mr Jaju.
Buyers abroad are pointing out at crashing domestic prices and are quoting lower rates. They are of the view that there is room to cut the minimum export price. “We are getting enquiries from Indonesia and Malaysia but buyers are saying even $400 is higher,” said Mr Madan Prakash, Director of Chennai-based Rajathi Group of Companies.
In line with their view, the Maharashtra Government and the Union Agriculture Minister, Mr Sharad Pawar, have demanded cut in the export floor price.
“The current falling trend will continue as farmers will have to clear stocks with arrivals of rabi onion looming. We expect more pressure on prices,” said Mr Jaju.
Mr Prakash said prices could rise next week and then drop.