Onion prices up 70% on supply crunch

Onion prices surged 70 per cent in just one month's time to Rs 90-100 per 10 kg and may go up to Rs 120 per 10 kg because of supply shortage in the markets across the country. "Suppliers have failed to meet the rising festival demand, thereby creating short-term supply tightness in the markets," Nitin Parikh, chief, Hari Om Traders, said.

The current situation may continue at least for the next 20 days, till the time supply from Karnataka flows into the markets in adequate, Parikh said.

In contrast, a Amritlal Ashokumar & Co source said, "We do not take onion from Karnataka because of high water percentage in it. It takes at least one day to transport onion from Karnataka to Mumbai and, therefore, the spoilage rate is comparatively higher."

Supply of onion from Karnataka this year, 30 per cent less than last year, is expected to continue till November, as onion fields still have lots of water.

"Onion supply from Karnataka generally hits the markets by September 25, which is quite close now. Supply from Satara, Maharashtra, also starts in the first week of October. So, when these supplies start reaching the markets, the tightness would ease out," Parikh said.

Satara adds 20-25 gadi (1 gadi=10,000 kg) of onion daily to Mumbai, which daily consumes around 600 tonne, and other markets.

India's total consumption is around 4,000-5,000 tonne per day and the current stocks in the country stand at 3,00,000 tonne.

Parikh said that India exports around 50,000 tonne of onion to Gulf and Malaysia, but sometimes the quantity even comes down to 5,000 tonne when such shortages hit the market.

Raising a stink

The current situation may continue till adequate supplies from Karnataka flows into the market

India exports around 50,000 tonne of onions to Gulf and Malaysia, but some times the quantity may even come down to 5,000 tonne when such supply shortage hits the market