Why do onion prices fluctuate 

Maharashtra is the top onion producer in India, accounting for over 33 per cent share of the country’s requirement of about 50,000-60,000 tonnes every day. However, with little concrete data available to them, onion growers plan their seasonal operations based on unreliable estimates.  

With tomato prices skyrocketing in the last few months, Raju Shinde, an onion farmer from Nashik, shifted to tomato cultivation. But, with onion prices rising, he is in two minds. Raju, like other farmers, does not have any data to estimate the availability of onions and tomatoes in the market. They decide their operations based on whatever information they gather.

“There is no accurate data available to farmers, which is the major problem. Details such as the number of farmers cultivating onions and the estimated production is not available at the individual level, and the entire chain runs on estimates that have no database,” says Vilas Shinde, Chairman and Managing Director of Sahyadri Farms in Nashik.    

The base of onion cultivation 

Onion produced in Maharashtra is transported to markets in Bhopal, Jaipur, Lucknow, and Delhi, from where it is distributed to Himachal Pradesh, Uttarakhand, Jammu and Kashmir, Punjab and Haryana.

Traders in Lasalgaon, Asia’s biggest onion market, say that the Kharif onion will arrive late in the market, while rabbi stocks in the chawls are damaged.

Farmer and activist Shailesh Patil says that every season, farmers take a call on cultivation based on whatever information is available with them. Some farmers have WhatsApp groups to share the information, which helps them take collective decisions.  

Price impact

Many farmers in the Nashik region have turned to other crops as onion prices fell below their expectations in the last three seasons. This trend will add to the pressure on supply. Experts say there could be a shortage in September and October, when only a low-grade onion would be available in the market.

“As tomato farmers have gained handsome returns, many onion farmers in the region are now going for tomato cultivation, and in the next season you will see them dump tomatoes on the roadside, as prices will fall due to a glut in production,” says Suresh Jadhav, a farmer.      

The onion saga

India is the second largest producer of onions in the world and Indian onions are famous for their pungency.

“This product is available round the year, but there is no systematic chain of communication to keep farmers updated about the market and the availability of the product. At least the farmers are not aware of any such system,” said a group of farmers in Mohadi near Nashik. They added that the government must keep them in the loop and share all available data.

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