Onion farmers harvest premature crop to cash in on high prices in mandis

Farmers in Nashik district, Maharashtra — a major producer of onion— have started harvesting the premature crop to cash in on the high prices in mandis.

Farmers expect onion prices to decline on increasing import and arrivals from local sources. Before that, however, they want to take advantage of high onion prices by selling premature onion bulbs.

Good-quality onion was quoted at Rs 93.50 a kg on the higher side on Wednesday in the benchmark Lasalgaon mandi of Nashik — Asia’s largest onion selling market yard — a rise of Rs 2.60 a kg from its prevailing prices on Tuesday. 

On the lower side, however, the poorest-quality onion was selling at Rs 25.50 a kg on Wednesday as against Rs 20 a kg on Tuesday.

Thus, the model price of onion works out to Rs 70-75 a kg in Lasalgaon, translating into Rs 100-125 a kg in the retail markets of the country.  Early 2019, however, onion prices were hovering around Rs 2-3 a kg in the wholesale mandis of Nashik.

“The early crop arrival from Rajasthan exhausted in a few weeks this year. The seasonal crop was reported to have been damaged in major growing states, especially Maharashtra, due to excessive rain. Farmers are bringing in pre- and un-matured crops for selling in mandis. Around 25 per cent of arrivals in Lasalgaon mandi is of pre- and un-matured onion of the current season,” said Jaydatta Holkar, chairman, Lasalgaon mandi.

Onion arrivals in the Lasalgaon mandi were reported at a mere at around 400 tonnes (400 trucks of around 1 tonne each) on Wednesday as compared to 440 tonne on Tuesday.

The significance of the current arrivals can be gauged from the fact that the Lasalgaon mandi alone witnesses 22,000-25,000 tonnes of arrivals every day during the peak harvesting season.

“Since the government has imposed a stock limit on stockists and retailers, farmers are bringing in limited quantities of the new season crop to avoid spoilage. Traders, in turn, dry their purchased onion in the sun to reduce moisture and fetch higher price,” said Sanjay Sanap, an onion wholesaler in Nashik. 

India’s annual onion production is estimated at around 23 million tonnes. With an annual export between 3 and 4 million tonnes, India’s onion consumption is projected at 19-20 million tonnes.

Meanwhile, MMTC has contracted for 11,000 tonnes of onion import from Turkey after the government-owned commodity-trading company signed an import deal of 6,900 tonnes earlier to increase its supply and eventually cool down prices. 

Holkar, however, has demanded the government withdraw the stock limit, which was halved on Tuesday to 5 tonnes for retailers and 25 tonnes for wholesalers from their earlier limits of 10 tonnes and 50 tonnes, respectively.