New arrivals may steady onion prices

The recent rise in onion spot prices across the country is likely to be capped as fresh kharif crop arrivals from Maharashtra, the leading producer, is likely to hit the market in next 15-25 days, dealers said.

Spot prices in leading markets of Vashi, Lasalgaon, and Pimpalgaon in Maharashtra have risen by over 25 per cent in the last two weeks on reports of crop damage due to rains.

Onion prices in Pimpalgaon and Lasalgaon, the main wholesale markets, are hovering at Rs 600-800 per 100 kg, up from Rs 550 a month ago.

In Vashi, prices of Nashik variety have risen to Rs 770 per 100 kg, up Rs 10.In the Mumbai retail market, prices range from Rs 11-18 per 1 kg, depending on the quality.

Traders said for the next two weeks, prices are may not see major swings on either side and would hover at Rs 600-800 per 100 kg, depending on the quality, in most wholesale markets across the country.

Prices will slowly decline once the new crop enter the market.

"Recent unseasonal rains with hailstorm in Maharashtra have damaged the kharif crop in Lonand and other areas where it was ready for harvest.

In Netale, Sinnar area of Nihad, and Sinnar taluka, the crop in some belts was damaged completely due to hailstorm," said Nashik-based National Horticultural Research and Development Foundation in its November report on onion.

The report also said Lasalgaon, Pimpalgaon, and Manmad areas of Nashik have not reported any significant damage to onion crop.

"There is no reason to panic, as the fresh arrivals will begin in next 15-25 days and the crop loss is marginal to the tune of 5-10 per cent," said Satish Bhonde, additional director, NHRDF.

In 2006-07, kharif onion output is seen rising 12.1 per cent to 13 lakh tonne, compared with 11.6 lakh tonne in 2005-06.

"There will be just temporary rise in prices. But once farmers dry the onions, then they will arrive in the market in full swing and rates will eventually ease," said Bhonde.

Nivruttinath Shinde, a Pimpalgaon-based wholesale dealer, said the demand was only for superior quality onion, while the medium quality onion attracted very few buyers.

"Around 500 trucks (1 truck=1,000 kg) of medium quality onion from warehouses are arriving. Ideally, only 200 trucks should arrive at this time," said a Lasalgaon-based trader.

New onion crop arrivals have started in certain parts of Maharashtra, to the extent of 20 trucks a day.

In Pimpalgaon, onion spot prices today were ruling at Rs 741 per 100 kg, up Rs 50-70 from Friday's close.