Onion prices continued to rule firm in markets around growing centres in Mahrashtra and Gujarat. Lack of monsoon rain in Maharashtra and Gujarat is the main reason for the firm trend.

“Monsoon has been poor so far. It has raised a question mark over kharif onion prospects and pushed up prices,” said a trade source from Nashik.

According to the India Meteorological Department, rainfall deficiency in Maharahstra and Gujarat is over 50 per cent till now.

In Pune Agricultural Produce Marketing Yard, the modal price or the rate at which most trades took place increased to Rs 815 a quintal on Friday. The modal price throughout the week was Rs 775.

Over 800 tonnes arrived in the market compared to a little over 500 tonnes on Wednesday and Thursday.

In Lasalgoan in Maharashtra's Nashik district, the modal price on Thursday was Rs 861.

“Rabi onion has been harvested. Whatever is coming to the market are stocks held by traders and farmers. They are bringing the produce in a limited way, and it is contributing to the firm trend,” the source said.

Onion prices usually tend to rise during June-August, since kharif onion crop arrives in the market towards the end of September.

“Arrivals are a little lower than the usual demand we are seeing, especially from South India. Export demand is normal,” said the source.

Further delay in monsoon could see prices under pressure since farmers will delay sowing. Production this year is a record 14 million tonnes and, therefore, prices may not surge to last year's level of about Rs 100 a kg at retail outlets, sources believe.

However, the current firm trend is due to farmers holding back produce, hoping for a further rise in prices.

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