Onion prices surged this week on lower arrivals due to rain in growing areas.

“Rain lashed growing areas such as Ahmednagar and Nashik, affecting onion arrivals. Demand, on the other hand, was good,” said Mr Rupesh Jaju, Director of Nashik-based United Pacific Agro Pvt Ltd.

“There is good demand in South. Also, the crop in South India, expected to arrive in the markets now, has been delayed,” said Mr Madan Prakash, Director of Chennai-based Rajathi Group of Companies that exports agri-products.

The modal price or rate at which most trades took place was Rs 975 a quintal at Pune Agricultural Produce Marketing Committee (APMC) yard. Compared with last week, prices are higher by Rs 150.

At Lasalgoan APMC, Asia's biggest market for onion, prices were up at Rs 951 against Rs 861 last week.

Arrivals averaged around 750 tonnes each in major markets.

Demand for onion is coming from West Bengal and Bangladesh, said Mr Jaju. “Export demand from the Gulf countries is also there,” he said.

“Barring the Gulf, there is not much of export demand,” said Mr Prakash. Still, export-quality onion costs Rs 1,100 a quintal.

“Prices usually rule at Rs 10-12 a kg during Diwali. But they have increased to that level now itself,” said Mr Prakash.

“The reason is that there is a huge supply gap. People in the Gulf, too, have begun to build stock for Ramzan,” said Mr Jaju.

In the export market, China and Pakistan have begun to compete with India, especially in the Far-East market.

“The quantity that countries such as Malaysia are buying from China or Pakistan is not much,” said Mr Prakash.

“In the Gulf, people don't buy Chinese onion. They do buy Pakistani onions a little,” said Mr Jaju.

With rain continuing in the growing areas, onion prices could firm up in the next week to 10 days.

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