Higher onion acreage may keep prices stable

Eastern states like Bihar, West Bengal and Odisha have increased onion production which is helping meet the shortfall

Onion prices have started moving up gradually, with arrivals having reduced, ahead of the kharif sowing.

However, despite forecasts of below-average rain this year, prices are currently expected to behave normally, as the eastern states are promoting sowing of onion this season. Knowledgeable sources say sowing in these states could go up by 10-20 per cent, depending upon the monsoon. These states together, though, produce hardly 10 per cent of the total crop; their demand is much higher and they import from places such as Maharashtra.

“These states have increased seed buying from us and we believe the increased crop from these states this season could be a good hedge for the onion market,” said R P Gupta, director, National Horticultural Research and Development Foundation.

India’s annual output for two years has been about 19 million tonnes, despite uneven rain. About 40 per cent of the sowing is in the kharif season. Till the new crop arrives, stored ones feed the market. If the monsoon or new arrivals are delayed, prices surge in the period. At present, the market is being fed with the rabi crop and prices have increased only gradually in the past two months, by 10-15 per cent. At Nashik’s Lasalgaon mandi, one of the largest, the average price is quoted around Rs 12.50 a kg, although lower quality is sold at Rs 5 and some good quality onions are quoted at Rs 16 a kg.

Gupta believes the stored stock is around 3.5 million tonnes, which will continue to come to the market till kharif onion arrives. The arrivals till date are of good quality.

The meteorology department has said this year’s monsoon will be below average. However it is expected to start on schedule. Onion sowing in Maharashtra is expected to begin next month.