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Onion prices have shot up 40% in the last two weeks to Rs 18.50 per kg at Lasalgaon, the country's largest wholesale market for the edible bulb, despite the imposition of minimum export price on the vegetable to check its domestic rates from going up.
Prices have increased due to speculation amid anticipation of weak monsoon affecting Kharif (summer-sown) crops, National Horticultural Research and Development Foundation (NHRDF) Director R P Gupta told PTI.
The impact of rise in onion prices at Lasalgaon in Nashik is being felt at Delhi's Azadpur market where they are ruling at Rs 15-25 per kg depending upon the quality, traders said.
Average rate of onions at Lasalgaon have soared to Rs 18.50 per kg from Rs 13.25 per kg on June 18, as per NHRDF.
On June 17, the Centre had imposed a minimum export price (MEP) of $300 per tonne on onion to curb overseas sales and control rising retail prices.
In last one month, prices have jumped by 90% to Rs 18.50 per kg as against Rs 9.75 per kg on May 30.
"Onion prices have gone up purely on anticipation of drought as there has not been any decline in the supplies," Gupta said.
About 39 lakh tonnes of rabi onion is stored in the country but that may not be sufficient if Kharif crop gets affected on account of deficient monsoon, he added.
The Met department has predicted a below normal monsoon this year, posing threat to Kharif crops including rice. Monsoon rains are key for the farm sector as about 40 per of agriculture land is irrigated through rain water.
The domestic demand during the lean period from June to November is met through stored rabi (winter) crops and fresh kharif (summer) crops.
Onion production is estimated to have risen to 192 lakh tonne during 2013-14 crop year (July-June), from 168 lakh tonne in 2012-13. Exports meanwhile fell to 13.58 lakh tonnes last fiscal from 18.22 lakh tonnes in 2012-13.
Onion is predominantly a rabi crop grown throughout India. During the kharif season it is grown mainly in Maharashtra, Karnataka, Gujarat and Andhra Pradesh.
