Onion soars on poor supplies of quality bulbs; Govt to import 10,000 tonnes

There appears to be no immediate relief in sight for onion consumers as prices of the bulb have touched their highest levels since November 2013. While traders blamed hoarding by stockists, experts attributed it to the poor quality of stored onion that is not able to attract demand.

Notably, since the beginning of this month, the modal or average onion prices have more than doubled at Lasalgaon, the major market, from ₹1,551 a quintal to ₹3,600 on July 28. The surge is sharper since July 17, when prices ruled at ₹1,975.

At the retail level, the maximum price was recorded at ₹59/kg in Thiruvananthapuram on Wednesday, while the minimum was pegged at ₹15 in Gwalior, Panchkula and Sagar, according to the Consumer Affairs Ministry. In Delhi, the retail prices touched ₹44/kg on Wednesday.

Reacting to the price rise, the Government has already initiated the process of imports to ease supplies. A senior official said that 10,000 tonnes of onions were going to be imported from Egypt, Pakistan and China through a tender floated by the National Agricultural Cooperative Marketing Federation (Nafed).

“There is sufficient stock of onions in the country so there is no cause for worry. Nafed has also floated a tender to import 10,000 tonnes of onions,” he said. Orders are likely to be regulated as per requirement in units of 500 tonnes.

“The extent of price rise is less in northern markets like Uttar Pradesh or Delhi. But prices rose sharply at markets in Maharashtra and other southern region,” said RP Gupta, Director, National Horticultural Research and Development Foundation.

“There is no reason to panic. We had 189 lakh tonnes (lt) of onion production and about 40 lt was stored in the cold storages. But only 25-30 per cent of the stored onion came to market. About 25-30 lt is still stored in cold storages. The price rise isn't justified,” Gupta added. The early harvest of the kharif crop is underway in parts of Andhra Pradesh while supply from Karnataka is expected by mid-August and should help prices stabilise, the official said.

Agriculture experts in Gujarat blamed the poor quality of stored onion for causing surge in the prices. Market players mentioned that fresh arrivals will start not earlier than September.

“Till September we will see supplies from cold storages only. Therefore, the prices are likely to remain firm until fresh arrivals begin around September,” said Hareshbhai Dave, Chairman, Mahuva APMC, one of the largest trading place for onion in Gujarat.

India produced 18.9 mt of the crop in 2014-15 while consumption is estimated at around 16.5 mt. Between 15-20 per cent of output is estimated to have been damaged due to unseasonal rainfall and hailstorms between end-February and early-April.

The supply of good quality onion has almost dried in the market, thereby leading to the offloading of poor quality onion, which was damaged due to unseasonal rains earlier this year.

“This surprises us as exports have been restricted by increased MEP and stocks are there in the cold storages. Quality is an issue but another reason could be the delayed rains in growing regions especially in Gujarat and parts of Maharashtra. And therefore stockists are hoarding the commodity in anticipation of higher prices in future,” Dave added.

At Mahuva market in Gujarat, prices surged from ₹1,125 on July 16 to ₹2,250 on July 29.

It was on November 12, 2013 that onion prices had touched ₹3,500 at Lasalgaon market in Maharashtra with arrivals of 13,395 quintals. On Friday, prices were at ₹2,500 with arrivals of 5,000 quintals.

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