Traders fear rise in onion prices due to fall in rabi sowing in Maharashtra

Some traders fear that the recent fall in arrivals is a signal and if farmers start storing onions in cold storages, prices will start strengthening and things could worsen in January

Rain deficiency in Maharashtra is affecting rabi sowing and onions, a commodity as sensitive for consumers as it is for one's eyes, might be among 

those affected.

Thanks to lower sowing and yield, the overall onion crop is estimated to be 10-15 per cent lower. A third of total output is from Maharashtra, noted 

a state government official.

Sources say the worry is when rabi arrival time comes in January, a price spurt is a possibility. The crop this year, 2018-19, is estimated at below 20 million tonnes, a second year of lower production.

Kharif crop arrivals have started at the major wholesale market of Lasalgaon (Nashik district) and its surrounding areas. Prices are around Rs11. New crop arrivals were 30 per cent lower on Friday.

Ajit Shah, president, Onion Exporters Association of India, says prices have been moderate for a while because export demand is down. “India’s onions are costlier and importers have shifted to Pakistan, which is selling 40 per cent cheaper than India,” he explained. He was optimistic that if export demand is not revived in the coming months when the rabi crop arrives, prices will not see much of an impact.

Some traders, however, feared that Thursday's fall in arrivals was a signal. If farmers start storing onion in cold storages, then prices will start strengthening, they say.

India produced 22.5 million tonnes of onion in 2016-17. The 2017-18 crop was estimated at 22 mt. If the crop falls 10 per cent from here, there would be reason for worry.