Onion prices gained this week on lower arrivals and higher demand.

“Arrivals petered out a bit this week as farmers are holding back their produce,” said Mr Madan Prakash, Director of Rajathi Group of Companies that exports onions and other agricultural produce. Export demand has also resulted in prices increasing.

While markets were closed on Friday due to Good Friday, on Thursday prices touched the Rs 500-level in markets such as Pune after two weeks.

But elsewhere in markets such as Lasalgaon, Asia's biggest onion market, and Pimpalgaon, the modal price or rates at which most trades took place increased to Rs 600 a quintal from around Rs 500 last week.

Arrivals generally were below 500 tonnes this week at Pimpalgaon, except Wednesday when they were 689.9 tonnes. In Lasalgaon, arrivals were down to around 1,000 tonnes daily.

Two weeks ago, arrivals averaged 1,500 tonnes. In markets such as Pune, arrivals were over 2,000 tonnes a fortnight ago.

“Export demand is good and enquiries from Malaysia and Sri Lanka are good,” said Mr Madan Prakash.

Indian onions are currently the cheapest in the global market.

At present, Indian onions are quoted between $175 and $200 a tonne.

Onion prices have begun to surge after the Centre lowered the minimum export price to $175 at the beginning of this month. The minimum export price is in effect to ensure availability of onions in the domestic market and check any surge in prices, like the way it happened in December.

Then, the Centre had to ban exports, before lifting it in February with a rider that the minimum export price will have to be $600 a tonne. Since then, the minimum price has been lowered five times to the current $175.

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