Onion, potato prices surge this week

Onion prices have moved up 14% and potato by 10% in major wholesale markets

Despite assurances from the Union government that it would not let the prices of essential commodities move up, the prices of two recently inducted vegetables in this category — onion and potato — have recorded a sharp spurt in two days. Onion prices have moved up 14 per cent and potato by  10 per cent in major wholesale markets.

Data from the National Horticulture Research and Development Foundation (NHRDF) showed onion prices jumped by 14.3 per cent in Chennai to close at Rs 32 a kg on Wednesday, compared to Rs 28 a kg on Monday. In the Amritsar mandi, it was Rs 20 a kg on Wednesday compared to Rs 18 a kg two days earlier. Potatoes in Agra were Rs 15.60 a kg on Wednesday, compared with Rs 14.15 a kg on Monday. In the Delhi mandi, potato was Rs 17.15 a kg versus Rs 16.45 a kg on Monday.

Food Minister Ram Vilas Paswan brought both onion and potato under the category of essential commodities and asked states to raid hoarders and act on stokists. Also, the government raised the minimum export price (MEP) of onion to $500 a tonne on July 2, from $300 a tonne. The MEP on potato was made $450 a tonne on June 26, to discourage their export.

“The reason for the price rise is not known. We have enough supply in the market as of now,” said R P Gupta, Director, NHRDF. According to trade sources, supply has been disrupted due to heavy rainfall across the country in the past two days. Arivals in the Amritsar mandis fell 55 per cent in the past two days to 150 tonnes from the earlier level of 300 tonnes. Similarly, onion arrivals into the Delhi mandi  fell to 847 tonnes on Wednesday from 1,607 tonnes the previous day. As for potato, the Bangalore spot mandi witnessed a sharp decline in inward supply to 704 tonnes on Wednesday versus 1,838 tonnes on Monday.

Madan Sabnavis, chief economist of CSRE Ratings, said in a recent interaction with Business Standard, “The price movement of any commodity is the result of the demand-supply situation. The government cannot do anything beyond a point.”