Onion may bring more tears ahead

Only two months' stock left, new crop to arrive in October

With stocks to cover two months of consumption and a new crop delayed by at least a month, the onion crisis is likely to become acute in September.

The National Horticultural Research and Development Foundation estimates the onion inventory across the country at 2.4-2.5 million tonnes. India eats 1.2 million tonnes of onions a month and the current stock will last till the end of August.

The next onion crop is expected to be delayed by at least a month because of late sowing. Early kharif onion should begin arriving in mandis towards the end of September.

Though Food Minister Ram Vilas Paswan claims the country has enough onions in stock, there will be a gap in supply for a month. Traders said onion prices would skyrocket in September.

"Our estimates suggest the onion inventory should be 2.4-2.5 million tonnes with farmers and stockists after accounting for spoilage, which is equivalent to two months of consumption," said R P Gupta, director of the Nashik-based National Horticultural Research and Development Foundation. "The problem will aggravate in September, when the existing stocks finish. The government should start importing," he added.

Atul Shah, director of the Agricultural Produce Marketing Committee at Pimpalgaon, said onion sowing was late by a month, leading to a month's delay in harvesting. Imposing stocking limits would improve supply and correct prices for a while, but the real crisis would be in September, he added.

The Centre on Wednesday brought onions and potatoes under the Essential Commodities Act, which imposes stocking limits and permits action against hoarders. The Centre has asked major onion-producing states to prescribe holding limits. Wednesday's announcement had an impact on prices. While the price fell seven per cent to Rs 1,875 a quintal in Maharashtra's Lasalgaon mandi, Asia's largest onion market yard, the price in Kolkata shot up by 3.26 per cent to Rs 2,375 a quintal. In Delhi, the price of onion moved up to Rs 1,988 a quintal on Thursday from Rs 1,950 the previous day.

The Centre's threat of action against hoarders had no impact as arrivals in the Lasalgaon mandi fell to 1,050 tonnes on Thursday from 1,225 tonnes the previous day.

Traders in Lasalgaon were disappointed with the government's decision to bring onion and potato under the Essential Commodities Act. "The government does not protect farmers when onions are sold at Rs 1-2 a kg during the peak harvesting season. There is a hue and cry when farmers get a few rupees extra in a shortage," said Sanjay Sanap, a trader in Lasalgaon.