Onion prices sink 65% on arrivals

Supplies of low-priced onions from Nashik and Pune flood markets

Onion prices have sunk 65 per cent in the last 20 days owing to rising supply from local producing centres including Nasik and Pune.

The prices plunged to the Rs 60 per 10 kg mark from the level of Rs 170 per 10 kg in the aforesaid period on good arrivals from small and big onion-producing centres in Maharashtra.

"We are receiving about 70-80 gadi (carriers) of 12-15 tonne each daily. At times it goes up to 90-100 gadi also, owing to abundant supplies from onion growers. Onion is a perishable commodity which cannot be stored for long," a leading Mumbai-based trader said.

Nasik and Sanganer (near Pune) are the main areas in Maharashtra that produce and supply onions in huge quantity.

Onion suddenly turned a precious commodity in the domestic markets because of short supply following floods that caused much waterlogging in the onion plantation fields.

The prices started spiralling up and went beyond the common people's purchasing power when they touched a high of Rs 25-27 per kg in the rural and the urban markets in September.

With the rising demand, the situation forced the government's to allow onion imports from Pakistan and China.

According to the National Agricultural Cooperative Marketing Federation (Nafed), India planned to import 2,000 tonne onion from China and 650 tonne from Pakistan, through the government agencies and private traders.

Of late, India, which had been an importer until recently, started exporting onion. Traders from various parts of the country have begun shipping their consignments to countries such as Malaysia, Dubai and Colombo, daily. However, exact quantity of exports is not known.

"It is quite difficult to ascertain the total quantity of exports and imports, as the trade is done through individual traders and tracking their data is difficult," the trader said.

Maharashtra has stopped buying onion from Karnataka and Rajasthan as the locally available variant costs Rs 6-7 a kg vis-a-vis Rs 8-9 a kg in the aforesaid states. Even the prices of imported varieties from China and Japan run up to Rs 12-13 a kg, double the locally available ones. So, imports are not welcome any more.

Generally, local supplies start soon after Diwali. But this year, it started a bit late owing to supply disruptions following floods and other natural calamities such as earthquakes and storms in certain parts of the country.

Crop condition is good this year. Therefore, the production is estimated to meet the projected consumption, making no room for imports this year.

Next week, the prices are expected to decline further to Rs 50 per 10 kg and then, it would start looking up. But, for the entire year, till the next season, the prices are expected to stabilise in the range of Rs 6-7 a kg.

"Onion is a commodity that cannot be stored for more than eight days. Generally, farmers' supply to mandis takes two-three days; mandis' supply to stockiests, retailers and, then, consumers should not take more than eight days. Therefore, whatever onion we receive, we sell to stockiests. Thus, the prices are determined by the current supply-demand position," the trader said.