Onion price may escalate further in coming days

Local and global demand along with less availability of quality onion may push prices up

Inadequate availability of good quality onion has resulted in rise in price of the vegetable by nearly 27 percent in June even as traders expect the price to increase further with rising domestic and global demand.

Despite the steps taken by the Centre to curb rising prices of onion, experts feel damaged quality of the vegetable will continue to drive its price in coming days.

According to the National Horticultural Research and Development Foundation (NHRDF) website, the model price of onion in Lasalgaon near Nasik has increased from Rs 10.25 to Rs 13 per kg in June.

In retail market, the price of onion in different parts of India is ruling between Rs 25 and Rs 35 per kg.

"This year onion production has increased but uncertain rainfall during cultivation period has damaged the quality of the crop. Hardly 25 percent best quality onion is available in the market at present and as a result, price has gone up and it may increase further," said PuRshottam Chothani, an onion merchant of Nashik-based Vishal Exports.

Chothani expects onion prices to increase by Rs 5-7 to Rs 15-25 per kg in the wholesale market by the end of this month.

India expects 19.20 million tonnes of onion production in 2013-14, about 14 percent higher than previous year's 16.8 million tonnes. Onion production in Gujarat is likely to be 1.70 million tonnes in 2013-14 as against 700,000 tonnes in 2012-13. Demand for Indian onion is high in the global market. In 2013-14, the country had exported 1.48 million tonnes onion worth Rs 3,169.63 crore.

Ghanshyam Patel, chairman of Mahuva Agriculture Produce Marketing Cooperative (APMC) said, "Uncertain rainfall from January to March has damaged the quality of onion mainly in Maharashtra, Madhya Pradesh and Gujarat. The recent spike in prices can also be attributed to limited arrival of quality onion and it is expected to continue in July fuelled by export demand and peak domestic demand during the monsoon."

Another Nasik-based trader has cited delay in monsoon for rise in price of onion to and has further said that if rain does not arrive in states that grow onion, then price may further go up.