You are here: Home » Economy & Policy » News
Business Standard

Onion prices likely to remain at higher trajectory this festive season

The onion prices are expected to remain at a higher trajectory during October-November, as erratic monsoon may lead to an eventual delay in harvest, according to a report by Crisil Research

Topics
onion prices | festive season | Monsoon

Press Trust of India  |  Mumbai 

Onion, onion prices

The are expected to remain at a higher trajectory during October-November, as erratic may lead to an eventual delay in harvest, according to a report by Research.

Delay in arrival of the Kharif crop and shorter shelf life of the buffer stock because of Cyclone Tauktae are likely to fuel a rise in prices, it added.

"There is likely to be an increase of more than 100 per cent in this year as well, compared with 2018. Prices are expected to cross Rs 30 per kg for Kharif 2021 because of the challenges faced in transplanting the crop in Maharashtra, though this will be slightly lower year-on-year (1-5 per cent) on a high base of Kharif 2020," the report noted.

Onions prices are likely to remain at a higher trajectory during October-November following delay in crop arrivals due to rainfall deficit as August, the key month for transplantation, did not see any recovery in monsoon, the report said.

Rainfall deficit stood at a cumulative 9 per cent as of August 30, 2021, it added.

Research expects Kharif 2021 production to increase by 3 per cent year-on-year.

"Though the onion crop from Maharashtra is anticipated to arrive late, additional acreage, better yields, buffer stocks and the expected export restrictions are expected to lead to a marginal decline in prices," it noted.

In the corresponding last year, had doubled compared with the normal year of 2018 mainly due to supply disruption caused by the heavy and erratic that damaged the Kharif crop in Andhra Pradesh, Karnataka and Maharashtra, the report said.

This year, the southwest started on June 3, signalling a good start to the Kharif season, and farmers have preferred crops such as onion and chilli over highly perishable tomato, as per the report.

On average, India consumes an estimated 13 lakh tonnes of onion every month and to meet this demand, the crop is grown in three seasons - Kharif, late Kharif and rabi.

While rabi onion contributes to 70 per cent of the total onion production, the Kharif onion plays an important role in maintaining supply during the lean period of September-November, which is a major for India, the report said.

Maharashtra, Karnataka and Andhra Pradesh are major Kharif onion-producing states, contributing over 75 per cent of total Kharif production, it added.

Fluctuating monsoon is expected to pose challenges in transplanting the crop in Maharashtra, which accounts for 35 per cent of the total Kharif onion produced in the country, according to the report.

Thus, the vagaries of monsoon are expected to delay arrivals of Kharif onion in the market by 2-3 weeks to the end of October or beginning of November, therefore, prices are likely to be elevated until then, it said.

The government has taken several measures to curb the rise in onion prices, including a buffer stock of 2 lakh tonnes that has been set for onion for fiscal 2022.

Almost 90 per cent of the planned buffer stock for onion has been procured, with the highest contribution coming from Maharashtra (0.15 million tonnes).

Additionally, the government has also advised an increase in Kharif onion acreage in the traditionally non-onion-growing states of Rajasthan, Haryana, Madhya Pradesh, Gujarat and Uttar Pradesh to 51,000 hectares from 41,081 hectares, the agency said.

The report further added that onion acreage is expected to increase by 1 per cent year-on-year in marketing year (MY) 2021 (Kharif marketing year 2021 includes Kharif crops sown from April to August 2021 and harvested and sold in July to December 2021).

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, September 09 2021. 22:37 IST
RECOMMENDED FOR YOU
.