Onion prices crash below Rs 12 per kg in Lasalgaon on high supplies

Onion prices at Maharashtra’s Lasalgaon mandi (near Nashik, the trend setting one) have crashed with rising arrivals. On Monday, average prices fell below Rs 12 a kg, to Rs 11.8, an eight-month low. In early January, it was a little over Rs 35 a kg.

Prices rose after last August, with delay in kharif crop arrivals and estimates of lower production in 2017-18 to 23.4 million tonnes, one mt less than year before. The peak was on January 5; they’ve fallen since.

Major Singh, head of the directorate of onion and garlic research in Pune, said: “Crop arrivals are now at a peak. With arrival of the rabi crop expected (from April), prices could further come under pressure.” 

Traders say with the prices near Rs 11 a kg, dehydration units and processors will come to buy but they’d also wait to see how far prices will fall in the coming weeks. Last year in May, the average price at Lasalgaon fell to a low of Rs 3.5 a kg, a level below the cost of production. To prevent a repeat and ensure continuous supply in the lean season frm June onwards till the next kharif arrivals, Singh said, “We advise farmers to store onions to sell after May.” 

In the past few years, this has been the regular scene, of prices falling below cost just before the season ends and any report of damage to the crop or delay in kharif arrivals jacks up prices. As a hedge against this, the government is making efforts to diversify sowing. Seeds are being provided to Uttar Pradesh, Bihar and the northeast states, these being deficit areas. Two-third of the crop comes from five states — Maharashtra, Maadhya Pradesh, Karnataka, Rajasthan and Gujarat. 
 

Output in the country was 22.4 mt in 2016-17, from 18.9 mt in 2014-15. This year, as mentioned earlier, the output is estimated to fall by one mt.