Onion prices jumped 50 per cent in the last one week in Nashik and Vashi wholesale commodity markets in Maharashtra. Across all other mandis, the prices rose around 20 per cent.
Traders said prices would continue to rise til September-end, when the new season crop from Nashik, the country’s largest onion producer, reaches the market.
In Vashi, onion was traded between Rs 12-16 a kg on Friday, against Rs 9.50 a kg a week ago. In Kolkata, onion prices rose to Rs 15-16 a kg from Rs 13-14 a kg a week ago. A similar trend was seen in major markets in Delhi, Bangalore and Chennai, where prices rose by 20-25 per cent in the last week. In Nashik, however, the commodity was sold between Rs 12-14 a kg — a rise of nearly 40 per cent in the last one week.
Traders said the rise in prices was due to farmers’ unwillingness to release their stock, decay of existing stocks due to high moisture content and supply disruption. “According to estimates, 20-25 per cent of overall stocks was damaged this year,” said Yusuf Rizvi of Rizvi Exports, a Vashi-based trader.
“There was no need to panic like last year. So far, the situation is under control. In case of an increase in the intensity of rain, farmers will try to clear the stocks in a hurry, which will pull the prices down,” he added.
Echoing Rizvi’s views, Ashok Walunj, director of Vashi Agricultural Produce Marketing Committee, said: “Onion price goes up generally in the three-month lean period ending August, as farmers start supplying from warehouses. No new season crop is harvested anywhere in the country. But, new crop will arrive in the Bangalore market to ease overall prices across India.”
Arrivals were reported as usual in Vashi mandi at nearly 1,000 tonnes, while in Nashik an estimated 1,200 tonnes of onion hit the mandi on Friday. Nashik contributes nearly 30 per cent of India’s total onion output. In 2010-11, total acreage under onion production was estimated at 414,000 lakh hectares, with the overall output at 148,000 lakh tonnes.
Many traders, however, felt that onion price will continue to move upwards on the bacjk of rising demand during the festive season. The harvesting season has also been extended by a month in many smaller growing areas and the new season crop still remains premature because of late sowing.
The government is monitoring the situation closely and has already raised the minimum export price of onion in July and twice in the current month. The last revision, which increased the export price of onion to $300 a tonne, was aimed at discouraging exports and boost domestic supply. While releasing the food inflation data, the government had declared a staggering 44.42 per cent rise in onion prices for the week ended August 13.
“Since supply will not be more than the demand at least for one more month, farmers will continue to release in small quantity. This would result into a further supply squeeze in the coming days,” said Chandrakant Sutar, a Vashi-based onion trader.
Markets remained closed intermittently in the last few weeks due to festivals. Apart from that the commodity stored in open warehouses or plinth under asbestos shed was exposed to moisture due to the monsoon.
