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Onion prices continued to rule below Rs 450 a quintal this week as arrivals continued to swamp markets in Maharashtra and Gujarat, the main growing regions.
Though prices tended to look up a bit in the early part of the week as arrivals slid marginally, rates dropped sharply on Friday. In Lasalgaon, Asia's biggest onion market, the modal price or the rate at which most trades took place slid to Rs 361 as over 2,200 tonnes of onions arrived. Last Friday, the modal price was Rs 375 and with arrivals lower than 2,000 tonnes on Tuesday, the price increased to Rs 430.
In Gujarat, prices have dropped to levels of around Rs 300 a quintal in line with the general trend in the country.
Arrivals overshadow MEP
There was little impact of the Centre's decision to cut the minimum export price (MEP) for onion to $275 a tonne on Thursday.
"The lowering of the MEP has been overshadowed by higher arrivals. Quality onions are now available at Rs 400 a quintal," said Mr Rupesh Jaju, Director of Nashik-based United Pacific Agro Pvt Ltd.
Enquiries from overseas markets such as Asia-Pacific and West Asia are coming in but falling prices are deterring buyers, who are looking for bargains in case of further drop. "We are getting enquiries from even Europe," said Mr Jaju. Some exporters are building up inventories, buying the bulb for around Rs 400 a quintal.
'We have begun to get enquiries from the Philippines. We expect them to start buying from April,' said Mr Madan Prakash, Director of Rajathi Group that exports onion.
Prices are expected to be under pressure for another fortnight as growers are keen to dispose of their stocks.
'The rabi crop is due to hit the market from next month onwards. So growers are not holding back these late kharif onions,' said Mr Prakash.
Like last year, there is a possibility of growers holding back rabi onion. Traders see this happening if prices continue to rule low since the next arrivals will not be before October. "Prices could stabilise in another two weeks," said Mr Jaju.
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