Brace for onion tears this Diwali: Prices at six-week high in Lasalgaon Mandi

Onion prices, which saw a sharp fall for two weeks after government raids on wholesale traders, have rebounded steadily to hit their highest in six weeks.
 
Trading currently at Rs 21.50 a kg in the benchmark Lasalgaon mandi in Nashik district of Maharashtra, the export quality onion reported an increase of Rs 2 a kg on Friday and a 58 per cent jump from its recent low of Rs 13.60 a kg on September 19. At the retail level, however, onion is sold at Rs 30-34 a kg across major markets.
 
The sharp increase in onion prices assumes significance for consumers. “Onion is gradually inching away from consumers due to the sharp increase in its price. Prices have jumped sharply over the last two weeks despite adequate supply to mandis. In fact, demand has suddenly emerged from all across the country due to floods in Gujarat, Madhya Pradesh, Bihar and West Bengal. There are reports of crop damage of kharif onion in Karnataka. Hence, the entire country’s onion demand has now concentrated on the Nashik district of Maharashtra. The early kharif crop reported damage due to late September rainfall,” said Sanjay Sanap, owner of Shivkrupa Traders, a wholesaler in Lasalgaon.
 

Onion arrivals, however, have been normal with farmers bringing in 1,400 tonnes of the bulb to Lasalgaon on Friday, substantially lower than 2,429 tonnes on Thursday. But there is no dearth of supply to mandis.
 
“The entire quantity of onion gets sold as buyers await arrival of vehicles to place their bids. Buyers are ready to pay the price demanded by onion farmers and traders to meet their commitments in remote Indian markets. The prevailing price is genuine. Farmers have the opportunity to make some money for about a month before the new crop arrives in the market,” said Santosh Chavan, an onion trader in Nashik.
 
Arrivals of the new season crop normally begin in late October. This year, however, arrivals of the kharif onion crop are likely to start with a delay of one week.
 
“Hence consumers will have to bear with high onion prices for nearly a month. During this period, however, onion prices may hit Rs 25-30 a kg,” said Ajit Shah, president, Horticulture Exporters Association.
 
Interestingly, exporters find the current price non-remunerative as the price of onion in Sri Lanka is 10-15 per cent lower than in Indian markets.
 
Meanwhile, the Ministry of Agriculture estimates India’s onion output will increase 3 per cent this year to 21.6 million tonnes despite  floods and late season rainfall in some states, farmers’ shifting to other remunerative crops and crop damage.