After tomatoes, now onion likely to get costlier by September on low supply

Though India has a huge stock of onions, the high proportion of bad-quality onions due to excessive summer heat this year had led to an increase in the prices of good-quality onions

The price of quality onions is likely to nearly double to Rs 55-Rs 60 per kg by next month.

Experts said that though India has a vast stock of onions, the high proportion of bad-quality onions due to excessive summer heat this year has led to an increase in the prices of good-quality onions, according to a report in The Economic Times (ET).

In Nashik, the wholesale price of onions ranged between Rs 5 per kg and Rs 24 per kg on Wednesday, while retail prices were between Rs 25 per kg and Rs 35 per kg.

Traders said that the gap between the lowest and the highest prices of onions is due to the dwindling supply of good quality onions.

 

They added that farmers have started holding the supply as they expect the prices to increase soon.

Delhi getting inferior-quality onions  

A Delhi-based onion trader Rajinder Sharma said that about 30-40 per cent of the onion coming to Delhi is of inferior quality, due to which the prices have increased by 40 per cent in the last month.

A Maharashtra-based onion exporter Danish Shah said that the ample supply of inferior-quality onions at lower price points would help keep a check on the overall increase in onion prices.

“The price of good quality onions used at household level is likely to increase to Rs 30-35 per kg in wholesale trade by September, which translates into a retail price of Rs 50 per kg or more,” Shah added.

Concerns over southern cultivation

The main kharif harvest in key onion-growing states such as Maharashtra and Madhya Pradesh begins around Diwali. However, there are concerns about the southern crop this year, according to the ET report.

“Normally, we get full arrival of onions from Karnataka and Andhra Pradesh in September and October. However, this year, onion cultivation in Karnataka and Andhra Pradesh is down by 60-70 per cent as farmers cut the area due to subdued prices of the last two years," said Shah.

As per the ET report, the delay in transplanting onion crops in Maharashtra, which accounts for over 30 per cent of the country’s onion production, is also a concern, which is supporting the rise in prices.

Shah said that if rainfall spoils the new crop in southern India during its harvest period, it can further push onion prices upwards.