With rabi arrivals next month, onion prices set for steady slide

Arrival of the rabi crop is set to usher a fall in onion prices from next month, expected to continue till at least March or April.

Daily new crop arrivals are likely to double in the next couple of months from the current 30,000 tonnes a day, bringing down prices in both wholesale and retail markets. The former are expected to see a fall from the current Rs 10-14 a kg to Rs 7-8 a kg; in retail markets, from Rs 25-30 a kg to below Rs 20.

The kharif crop is arriving in the markets since November. This month, prices have fallen about 25 per cent to Rs 10-14 a kg at the country's largest wholesale one in onions, the Agricultural Produce Market Committee at Lasalgaon (near Nashik) in Maharashtra. Daily arrivals are 20,000-25,000 quintal a day, almost double from a month earlier. Total daily arrivals across the country are 150,000 tonnes.

"For the next three months, supply will not be an issue. Prices might go below Rs 10 a kg in wholesale markets for the next few months," said Purshottam Chothani of the Nashik-based Vishal Exports. Retail prices, he said, are already down from the earlier Rs 50 a kg, to Rs 30 a kg. It could go below Rs 20 a kg by end-February.

Says a Bhav-nagar-based trader, "Currently, most of the stock is being consumed by domestic demand; buying for export is almost nil. Once prices go below Rs 10 a kg, export demand might pick up."

India had exported 460,000 tonnes in May-August but these have been almost nil since September, after the government ordered a minimum export price of $700 a tonne. On December 10, this was cut to $400 a tonne. "Kharif sowing was late by two months, due to a delayed monsoon. After the monsoon revival, plantation began on a large scale. However, overall onion production might remain at last year's mark," said an official of the National Horticultural Research and Development Foundation.

 

Production was 18.73 million tonnes in 2014-15, after sowing on 1.15 mn hectares. For 2015-16, the final picture will be clear after January, when the rabi crop is ready to enter the markets. According to the NHRDF official, arrivals will double by end-January.