Rise in supplies, weak demand hit onion prices; exports yet to resume

Onion prices in the key growing regions of Maharashtra and Karnataka have crashed as demand from institutional buyers such as hotels and restaurants has dried up due to the lockdown. Also, the lack of export demand for the bulb has contributed to the price crash amidst new crop arrivals.

The monthly average modal price, which stood at ₹1,950 per quintal in February has now crashed to ₹722 in April at Lasalgaon, the largest onion market that sets the price trend. In March, the average modal price stood at ₹1,475.

About 70 per cent onion export from Nashik district is at a standstill and this has resulted in price crash, said Suvarna Jagtap, Chairperson of APMC at Lasalgaon. “The Lasalgaon market was closed for just four days during the lockdown. Farmers are bringing in onion, but there is no demand. The flow of onion in the market has not declined during the lockdown as farmers want to sell the produce because of uncertainty,” she said. Jagtap added that the ban on onion imports by Sri Lanka and Nepal has hit hard. “Even before the lockdown was imposed we were ready to export onion to these two countries, but they refused to accept consignments,” said Jagtap. She added that onion prices will stabilise once the export is resumed. Traders and farmers in Nashik have requested elected representatives to facilitate export so that the price crash is controlled.

Ashok Lahamage, a farmer from Nashik, said a huge amount of onion goes to hotels and malls and there are farmers who directly supply to them. “But the lockdown has forced those farmers to bring their onion to the market. Also, demand for Nashik onion is affected because onion from Gujarat has reached Nandurbar and Dhule areas and onion from Karnataka is in Solapur and other nearby markets,” he said.

Rabi onion is sown in December in Maharasthra. Because of unseasonal rains in October and November last year, the sowing of rabbi crop was delayed in many places. But this does not affect the market as the demand is low.

Low demand in Karnataka

In Chitradurga district of central Karnataka, farmers are finding it difficult to sell their produce. Farmers, aided by the availability of water, had expanded the area under onion during rabi as the prices were good ahead of the cropping season. “The supply is more with the arrival of rabi crop, while the retail demand is yet to come back,” trade sources said. Modal prices in Davangere have been ruling at ₹700 per quintal.

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