After tomato, and spices like turmeric and jeera, retail prices of onion have started to rise for the first time in nearly two years due to reports of sluggish kharif sowing on delayed arrival of monsoon in the key producing states of Maharashtra and Karnataka, traders said.
Inflation in onion, which had been in the negative zone since September, 2021, came in at 1.65% in June, 2023.
The benchmark prices at Lasalgaon, Maharashtra, the hub of the country’s onion trade on Monday was Rs 1350/quintal which was Rs 1250/quintal just a forth-night back. Two months back the prices were ruling around Rs 950/quintal.
“Prices are expected to firm up as there is a prospects of a lower kharif crops as monsoon rains have not been adequate in Nasik, Pune and Ahemdnagar districts,” Balasaheb Misal, former director, Manmard (Maharashtra) mandi board and an onion farmer told FE.
According to the department of consumer affairs, the modal retail prices of onion rose to Rs 25/kg on Tuesday from Rs 20/kg prevailed a month back.
“Kharif sowing in Maharashtra has been lagging because of late arrival of monsoon over the key growing districts and farmers are expected to hold on to their rabi harvest anticipating higher prices,” Deepak Chavan, farm sector analyst based in Pune, said.
Rabi onion harvested during April – June accounts for around 65% of the country’s onion production and meets the consumer’s demand till the kharif crop is harvested from October-November. Kharif harvested onions are not stored because of higher moisture content thus entering the market directly.
Sources said that the government is likely to sell around 0.3 million tonne (MT) onion purchased in the current rabi season from the farmers in market at an ‘appropriate’ time.
The government had procured 0.25 MT of onion for the buffer stock in 2022-23 against 0.2 MT purchased in the previous year as buffer stock.The estimated production of onion during the 2022-23 crop year (July-June) declined marginally 31.01 MT against 31.7 MT reported in the previous year. The output of kitchen bulbs was 26.64 MT in 2020-21.
Since the beginning of 2021, the government has not imposed a ban on onion exports which was the norm a few years back. India exported a record 2.5 MT of onion 2022-23, which is an increase of 65% from the previous fiscal. India is the biggest producer of onion and Maharashtra, Madhya Pradesh, Karnataka and Gujarat have more than 70% share in the country’s production.