Onion rates continue to trek north

Traders fear Maharashtra crop would take a month to reach the market

Despite good arrivals in most retail markets, especially in North India, onion prices continue to remain high. Traders attribute this to speculation following apprehension that the next Maharashtra crop will take a month to reach the market. The high prices, however, prevail despite supply exceeding demand.

"The first crop from Maharashtra was damaged and this had skyrocketed retail prices to Rs 30 per kg in parts of the country. Now, though supplies from Rajasthan are good, prices remain high," said Dayanand, president of Jaipur's Potato, Onion and Garlic Association (POGA).

Dayanand expects prices to remain at the current high level till the second week of December when the onion crop from Gujarat arrives.

"However, retail prices will only touch Rs 10 per kg, or even lower, in most markets by end-December when the second crop from Maharashtra arrives," he added.

The Jaipur market is receiving its required quota of 125 tonne per day from Alwar and Ajmer. According to Delhi's Azadpur mandi traders, the market is being flooded with onions from Alwar with daily arrivals of over 150-160 tonne.

"We get a minimum of 12-15 truckloads from Alwar but there has been a slowdown in pickup from us, resulting in the high prices," said a trader. "Prices in Delhi have artificially been kept higher. It's more to do with speculation regarding supply-demand mismatch than in reality," said Alok Ranjan, managing director of The National Agricultural Cooperative Marketing Federation of India (Nafed).

The federation is selling onion at its own outlets at Rs 12 per kg. It is one of the few canalising agents for onion export and import. As per the government's contingency plan to curb rising prices, Nafed has entered into distribution of the commodity.

A segment of market trace this speculation on the part of the traders to the government's decision not to import onions. Wholesale prices a month back had touched Rs 10 per kg when the government had decided to allow imports from China and Pakistan.

While there has been no shortfall in area coverage and production of onions in the country, heavy rains in Nashik had earlier delayed market arrivals.

It also led to crop damage with the high humidity conditions causing spoilage in stored onion, thereby affecting market availability.

India has three crops of onion in a year - early kharif, late kharif and rabi. Total production of onions in 2004-05 is estimated around 59.42 lakh tonne, up from last year's 57 lakh tonne.

The early kharif from Maharashtra arrived early October, the late kharif crop of Rajasthan came in early November, while the late kharif from Gujarat is expected early December and that of Maharashtra end-December. Rabi crop from Maharashtra and Rajasthan are expected around early March.