Onions are selling above Rs 100 per kg in Mumbai and other cities, as faulty supply management, an infective import policy and crop damage make it unlikely that prices will fall before December.
Researchers and market players predict the supply deficit will last till mid-December and it will take a month after that for prices to fall.
Onion prices have been rising for three months after crops were first affected by delayed monsoon and later excessive and prolonged rains in Maharashtra and Karnataka. Prices were expected to fall from November after the government banned exports and imposed nationwide stock limits on traders.
The government relaxed import norms but not enough to impress importers, said Ajit Shah, president of the Horticulture Exporters Association.
The government has relaxed fumigation and quarantine rules till November 30, but importers say quicker customs clearance and allowing them to trade with centres like Dubai, even if the onion stock is from Iran, would have been more effective.
A few traders have imported from Egypt, Turkey and other countries but the quantities are small and take 20 days to reach Indian ports. Dubai imports reach India within two days.
In Mumbai’s retail markets, onion sold at Rs. 110-120 per kg in the last two days. Arrivals from Maharashtra; Gujarat; Rajasthan, and Delhi moderated pries to Rs.65-75 for good quality onions. According to the National Horticulture Research & Development Foundation, prices have come down to around Rs.50-55 per kg and even below in some places.
A survey by Pune-based Directorate of Onion and Garlic Research (DOGR) found that farmers who used old sowing techniques have reported 70 per cent crop damage. However, farmers who used drip-irrigation based sowing controlled their damages.
“From middle of next month to end of the month prices will start moderating,” said Ajit Shah.