The price of onions continued to spiral upward at the benchmark Lasalgaon (near Nashik) market on Friday, on low arrivals and stockists holding back inventory in anticipation of a further spike.
In Delhi, state-owned trading entity MMTC issued invitations to bid for import of up to 10,000 tonnes, for arrival latest by September 15. Central government officials had a meeting to review prices and supply.
At Lasalgaon, the fair average quality was quoted at Rs 5,400 a quintal, a rise of Rs 500 a qtl from the opening trade on Thursday. The price has jumped 20 per cent or Rs 900 a qtl in the past two days, following traders’ hoarding. The wholesale onion price at Lasalgaon increased to Rs 54 a kg on Friday from Rs 52 a kg on Thursday. At the other benchmark market, Pimpalgaon (also near Nashik), onion is trading at Rs 4,900 a qtl.
Arrivals at Lsalgaon plunged to 240 tonnes on Friday from 1,021 tonnes on July 21. From Thursday’s 390 tonnes, total arrivals declined 38 per cent to 150 tonnes. In Delhi, the retail price remained Rs 60-70 a kg.
Traders attribute the price rise to unseasonal rain and hail at the rabi crop's maturing time in February–March, impacting the standing crop. Also, the standing bulbs in the field absorbed enough water to reduce their shelf life. So, farmers and stockists with good quality holding of stocks raised prices.
“Arrivals have reduced rapidly due to extremely low quantities left in the market. Since, the new season arrivals are six to eight weeks away, stockists find this an opportunity to sell their holding at a high price. Also, deficiency of rains in major producing centres has affected sowing of seed and planting of saplings, which helps the price’s move upwards,” said Atul Shah, Director, Agricultural Produce Market Committee, Pimpalgaon.
“We are hopeful that by September 10-15, adequate quantities of imported onions would come into the market and we have also directed MMTC to quicken the process,” an official said.
Traders also expect less output this kharif season, due to suspension in sowing of seed and planting of saplings by farmers at major growing centres in Maharashtra.
“Onion is bound to hit Rs 10,000 a quintal or Rs 100 a kg in the wholesale market, as supply remains deficient. In the retail market, therefore, it might touch even higher,” said Shah.
According to R P Gupta, Director of the National Horticultural Research and Development Foundation, “The price rise is in anticipation of drought in the major kharif onion growing states of Maharashtra, Karnataka and Andhra Pradesh. Consequently, harvesting of kharif onion would get delayed. Therefore, stockists are bringing less quantity into the mandis, which helps price rise.”
Early and late kharif varieties contribute 20 per cent each of India’s annual onion output; the other 60 per cent comes from the rabi season. India’s total annual output is estimated at 19 million tonnes.