Onion prices rise 30-50% in 14 days due to high demand ahead of Bakri Eid

Traders have started hoarding stocks in anticipation that the government may relax its measures to control prices

Onion prices have increased by 30-50 per cent in a fortnight due to reduced arrivals and increased demand ahead of Eid-al-Adha (Bakri Eid), according to a report in the Economic Times.

The report said that traders are hoarding stocks in anticipation that the central government may relax measures to control prices.

The average wholesale price of onions at the Lasalgaon mandi in Nashik on Monday was Rs 26 per kg, up from Rs 17 on May 25. The price of top-quality onions, which make up a small portion of the total traded volume, has exceeded Rs 30 per kg in many wholesale markets across the state.

 

The primary cause of the recent price hike is the imbalance between demand and supply. Onions arriving in markets from June onwards come from stocks held by farmers and traders. Farmers are hesitant to sell their stock, expecting prices to rise when there is a decline in the rabi crop of 2023-24, the report said.

Moreover, onion exports to Sri Lanka, Bangladesh, Malaysia, and other countries have resumed after the Centre lifted the ban order.

A Times of India report quoted a trader as saying, “Around 100 containers of onions (30 tonnes each) are being exported per day on average from Nashik district after the ban on onion export was withdrawn last month. This increased the demand for onions."

Despite sluggish export rates caused by a 40 per cent export duty, traders report strong domestic demand for onions in preparation for Eid-al-Adha on June 17.

The report quoted Vikas Singh, an onion trader from Nashik in Maharashtra, as saying, "There is strong demand for Maharashtra's onions, especially from the southern states."

Ajit Shah, president of Horticulture Produce Exporters' Association, said, "One of the main reasons for the prices to go up is that the farmers and stockists are optimistic that the central government may remove the export duty. Based on this assumption, they are holding onions expecting the prices to go up.".

In the last one week, prices of tomato, onion, and potato have surged in Mumbai due to extreme heat, and unseasonal rain showers affecting supply, and spoilage.