Onion farmers fret over price of new crop

As the new onion crop hits the markets in key producing states such as Maharashtra and Gujarat, the price of the bulb has slipped into a downward trend, bringing tears to growers.

High carry-over stocks from the last rabi season and slowdown in movement of the bulb to the consuming states, such as Tamil Nadu and Kerala, are seen weighing on the prices in producing states such as Karnataka and Maharashtra.

While the modal prices hovered at ₹1,200 per quintal in Lasalgaon, the largest onion market in the country on Thursday, the prices were even lower hovering between ₹530-750 in various markets of Karnataka such as Hubballi, Gadag and Ranebennur. In Yeola, Maharashtra, the modal prices were the lowest on Thursday at ₹325, while in Neemuch and Khandwa of Madhya Pradesh, they stood at ₹450 and ₹550 per quintal respectively.

Trade sources said that stock from the previous season is still stored with farmers, traders and stockists. This is creating a supply pressure on the market, looking to dispose the previous crop ahead of full-fledged arrival of new crop.

Lowest prices in years

Notably, the prices quoted in November are the lowest in several years for the comparable period. As the new crop arrivals peak by December, the prices are feared to fall further. The stockists and farmers, therefore, are now rushing to clear the last year's crop but in the mean time, onions in huge quantities have already started hitting markets.

In Mahuva market, Gujarat, about 12,445 quintal of arrivals were reported during three days of opening of APMC yard post Diwali festivities. In Delhi markets, arrivals are nearing one lakh quintals, while in Hubli, Karnataka arrivals already crossed 2 lakh quintals during November so far. However, farmers are still a worried lot as they are faced with a loss amid falling onion prices.

Huge loss

Prakash Kanjiya, an onion farmer in Padadhari, Gujarat stated that due to reduced prices, he is unable to recover costs of his new onion crop. “On one acre of sowing, I got overall output of about 36 quintals. Now that the prices have dipped so low to about ₹450 a quintal, we are unable to recover even our costs. Per acre cultivation cost is about ₹30,000,” he said.

Based on the current price levels, the returns for Kanjiya works out to about ₹16,200 for the entire crop, this means about 50 per cent loss.

“We have harvested onion and kept it aside on the farm itself and started cultivating wheat for winter crop. We will wait upto one month for prices to improve. Otherwise, will use half of onion as agri input and the remaining for self use,” he added.

There is still no clarity about the exact quantity of last year's crop lying with farmers, thereby making it difficult to predict the duration of slack period. However, experts see subdued price sentiment for another fortnight or a month at the most. Post which, the prices may start rebounding from the lows and head north. This is primarily because of the bleak crop prospects amid water shortage scenario.

“After December, we may see prices rebounding because the new crop may be lower than last year and there could be reduced supply. Most growing regions have received scanty rainfall. This will hamper crop prospects and we fear the output may fall by about 20-25 per cent. This will be reflected in the increased prices in January," added said Ashok Walunj, a Mumbai-based onion trader, who is also a director on the APMC Board in Vashi.

According to estimates by the Agriculture Ministry, onion production is seen declining marginally to 22.07 million tonnes during 2017-18, down from the previous year's 22.42 million tonnes. This is despite an increase in area at 1.315 million hectares, from 1.306 million hectares last year.

New crop arrivals have begun from regions such as Alwar in Rajasthan and Ahmednagar in Maharashtra. The lack of demand from exporters has also influenced the prices. “As new crop hits parts of Maharashtra, the exporters are preferring to source from those markets. Also it will be cheaper for them to source from those markets,” said Saleem Bahyatti, an onion trader in Hubballi, a major market in North Karnataka.

Further, huge stocks in Maharasthra from the rabi crop harvested in early 2018 had a major influence on the kharif crop harvested this September-October.

Meanwhile, sources said the Karnataka Government is exploring the option of implementing the price deficiency payment scheme for onion, on the lines of the one implemented by Haryana for tomatoes.

Under this scheme, the differential between the market price and reference price, which is arrived at based on the cost of cultivation, is paid to the farmers. “We have recommended the government implement the PDPS scheme,” said Prakash Kammaradi, Chairman, Karnataka Agricultural Prices Commission. He pegs the cost of cultivation at ₹7 per kg.

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