Sharing is caring!

The government has called for the import of 1 lakh tonnes of onion to help control rising prices. What has been causing an increase in prices since May, and how far can the new move be expected to reverse the trend?

Why onion prices are rising across India

Heavy unseasonal rainfall has locked the latest onion produce in wet fields throughout onion growing states of Maharashtra, Karnataka, and Telangana. As a ripple effect, onion prices increased everywhere in the country.

It rained nearly one and a half times more than normal in Maharashtra between October 1 to November 6, when rains doubled from the year-ago in Karnataka and Telangana received 65% more than usual. This unseasonal deluge damaged crops on one-third of Maharashtra’s cultivated area.

Farmers from the states affected by unseasonal rainfall are not able to harvest their crops from fields submerged under rainwater, boosting average wholesale prices by 120% within a fortnight at the Lasalgaon market in Nashik district; from Rs 25/kg on October 19 to Rs 55/kg on November 4.

Though prices are high, presently, there is no shortage of onions in Delhi, with daily arrivals crossing 1000 tonnes, much higher than the city’s daily consumption, as the fresh harvest of onions from Rajasthan is feeding NCR. Yet, prices will remain expensive in November and soften slightly in December before diving in January, when it will be farmers who would be severely affected.

Excess rainfall in Maharashtra, the top onion producing state of the country, in August, September, October and even November, destroyed the crops.

“I had harvested my onion just before Diwali and left it in the fields for drying. I cannot take it to market even today as we have been continuously getting rainfall not allowing the crop to dry,” said Vikas Bhosale, a farmer from Indapur taluka of Pune district.

“The area under Kharif onion was less by about 7% due to the impact of drought and delayed onset of monsoon. However, its impact is over now. The current rise in onion prices is primarily due to excess rainfall taking place earlier in Karnataka and now in Maharashtra. Farmers have harvest-ready crops they are not able to harvest due to wet fields. They are unable to dry the produce and take to the markets,” said a top official of the central government, who cannot be identified because he is not authorized to speak to the media.

Unfortunately, Consumer Affairs Minister Ram Vilas Paswan said on Thursday that the onion prices rose as Kharif crop fell short by 30% to 40% this year. However, traders and some top government officials strongly countered the minister’s statement. They said there is enough available in the country but the harvesting has been delayed.
“Such kind of statements coming from the minister will surely lead to a rise in prices,” said a trader from the Azadpur market.
It was the higher quantity of onion storages at about 52-53 lakh tonne against 50 lakh tonnes in the previous year that helped augment supplies as rains damaged fresh crops.

At Lasalgaon in Nashik, where rainfall has been heavy, the arrival of old crops that farmers stored over the past five to six months, is more than the new crop. On Thursday, Lasalgaon received 160 trucks of old crop and six of the new crop with average rates ruling at Rs 40/kg.

The sowing of the late Kharif crop has also been delayed due to rains.

“I have lost more than Rs 15,000 on onions seeds so far. I sowed about 12 kg seeds in two-phase and both times, the saplings rotted due to continuous rainfall. I have once again sowed some seeds of the rabi crop. It is cloudy even today. I hope that it does not rain anymore,” said Sanjay Desale from Malegaon taluka of Nashik district.
At the neighboring Ahmednagar district, where rains have receded a bit, the arrival of the new crop is on the rise. But its quality is inferior. As soon as farmers get a respite of a few days from the rainfall, they are getting the Kharif crop to the markets. However, the rain damaged crop can travel only up to 100 km to 200 km restricting its sales within Maharashtra.

“About, 80% of the current arrival at Ahmednagar market is of new onion. However, we cannot send it outside the state due to inferior quality,” said Nandu Shirke, chairman, Ahmednagar Onion Traders’ Association.

Presently, the highest price is fetched by the stored onion of the previous year’s rabi crop. Rabi onion has longer shelf life than the Kharif onion and hence commands a premium price.

When it comes to wholesale and retail prices, the official mentioned above said that at least in Delhi, the problem is not of availability. “We have more onion available than what is consumed by the city in a day as most of the ongoing harvest from Rajasthan is coming to Delhi.”

Rajinder Sharma, general secretary, Onion Traders Association of Azadapur APMC confirmed that there is abundant onion available in the market. “The wholesale rates are also coming down every day by about Rs 5/kg to Rs 10/kg due to growing arrivals from Rajasthan.”