Early crop may hit onion prices

Onion prices are likely to decline further to Rs 5 a kg in the wake of fresh arrivals from Maharashtra, which have hit the market early this season.

Onion prices are currently in the range of Rs 6.50-7.50 a kg at the Vashi APMC.

Arrivals from Maharashtra begin around April 1 and continue throughout the month. This season, the arrivals have begun earlier, albeit in small quantity, and are estimated to continue till the last week of April. The supply is expected to exceed the demand, owing to a bumper crop this season.

About 225 trucks, each laden with 12 tonne of onion, have been arriving at the Vashi APMC against the normal supply of 100-125 trucks.

A section of traders is apprehensive over the continued supply of onion. They argued that farmers might not sell their produce at prices lower than their cost of cultivation, raising fears of a tight supply once onion dropped below Rs 5.50 a kg.

Meanwhile, there is a fairly good demand from Malaysia and West Asia, coupled with a rise in local demand.

The country shipped around 10.5 lakh tonne of onion as on March 5 and the export figures for the current financial year were likely to touch 11 lakh tonne, a 41 per cent increase over the last year's exports of 7.78 lakh tonne, said analysts.

Although exports are zooming, the domestic production of onion is estimated to remain at the last year's level at 62 lakh tonne.