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Onion prices to surge by Diwali on low stock

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Crisil Marketwire Mumbai
Onion prices in major domestic spot markets are seen up by Rs 150-250 per 100 kg by Diwali on low stock and rising demand from local as well as overseas buyers, traders said today.
 
Today, onion spot prices in major markets of Maharashtra were in the range of Rs 490-550 per 100 kg, they said.
 
According to Nashik-based National Horticultural Research and Development Foundation's report on onion, released in September, around 700,000 tn onion is lying at warehouses, which is only 30 per cent of their storage capacity.
 
Around 2.34 million tonne onion were stored in warehouses in 2005-06 (April-March), against 1.9 million tonne in 2004-05.
 
Onion is grown throughout the year and in 2005-06 (April-March), around 6.22 million tonne onion was produced, up from 5.94 million tonne in 2004-05.
 
In 2006-07, India's kharif onion output is seen rising 12.1 per cent to 1.3 million tonne, compared with 1.16 million tonne last year.
 
In Lasalgaon and Pimplegaon, major onion markets in Maharasthra, the stock level is only 15-20 per cent while demand is robust, traders said.
 
New onion crop has been delayed this year by a month and is now expected only by November-end, leading to short supply, said Nivrutinath Shinde, a Pimpalgaon-based trader.
 
Arrivals have been delayed because of recent heavy rains in major regions cultivating the onion crop, which led to re-planting, he said.
 
Storage losses have also risen because of humid weather, traders said.
 
Today, around 600 trucks (1 truck=2,500-3,000 kg) reached Lasalgaon market from warehouses, and around 300 trucks arrived in Pimpalgaon, traders said.
 
Maharashtra is the main state growing the onion crop, followed by Gujarat and Uttar Pradesh.
 
Demand is seen on the higher side during the current month because of festivals like Diwali and Ramzan, said Kantilal Mangilal Surana, a Lasalgaon-based trader.
 
"Heavy demand from Delhi, Punjab and other states is expected to push prices up," said Surana.
 
Demand from exporters is seen steady, with inquiries pouring in from Pakistan and West Asia, traders said.

 
 

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First Published: Oct 06 2006 | 12:00 AM IST

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