Onion prices bounce back, up 27% in two days

After a week of continuous decline, the price of onions has bounced back in major spot mandis of Maharashtra, the largest producing state and which sets the lead for markets elsewhere.

With a minuscule quantity left for release before the new season crop comes to the market next month, traders seem to have lowered the supply to take advantage of the still-high prices.

The price has jumped by 27 per cent in two days at Lasalgaon in Nashik district, Asia’s largest spot mandi for the commodity. Between Monday and Wednesday, the premium quality went from Rs 3,250 a quintal to Rs 4,125 a qtl. It had touched a record Rs 4,700 a qtl at Lasalgaon on August 14 and then began falling.

The market was closed on Tuesday due to Raksha Bandhan. On Wednesday, total arrivals plunged 56 per cent to settle at merely 4,000 tonnes. “Traders are releasing lower quantities into the spot market, perhaps to maintain price,” said R P Gupta, director, National Horticulture Research & Development Foundation.

The commodity jumped by Rs 150 a qtl, to Rs 3,850 a qtl, in Mumbai and by Rs 900 a qtl, to Rs 4,100, at Pimpalgaon, also in Nashik district.

Arrivals at Mumbai and Pimpalgaon were 3,300 qtls and 5,000 qtls on Wednesday, as against 6,700 qtls and 15,659 qtls on Monday, respectively.

These spot markets opened after five days of festival closure. During the period, prices had eased, following news that import consignments were being loaded from ports here and in the south, to sell in local markets. The price of imported onion works out to Rs 25 a kg.

According to a leading trader and exporter here, arrival of the new season’s crop has begun from Andhra Pradesh, for distribution in Hyderabad, Bangalore and some mandis in Orissa. However, this quantity isn’t enough to impact the prices.

“Since the new season crop from Karnataka (which produces about a sixth of the country’s crop; a fourth comes from Maharashtra) is scheduled to hit the markets towards the end of September, the price is unlikely to cool until then,” said Gupta.

The government has levied a minimum export price of $650 a tonne but this hasn’t affected home prices appreciably.