Traders have indicated that the cost of high-quality onions, commonly purchased by households, is poised to undergo an almost twofold increase, reaching around INR 55-60 per kg by September. Despite the presence of an abundant onion supply within the nation, the prevalence of substandard onions caused by an extended period of intense summer heat this year has resulted in an escalation in the price of superior quality onions.
On Wednesday, the wholesale onion prices in Nashik varied from INR 5 per kg to INR 24 per kg, whereas the retail prices stood at INR 25-35 per kg.
The substantial difference between the lowest and highest onion prices was attributed by traders to the prevalent abundance of lower-quality onions, coupled with a decreasing influx of superior-quality onions. Traders noted that farmers have begun stockpiling onions, anticipating elevated profits similar to their counterparts in the tomato industry.
In addition to the significant presence of subpar onions, traders also pointed out that the elevated inflation rates affecting other vegetables have contributed to the upward surge in onion prices.
“There are a lot of onions in storage in the country even today,” said Rajinder Sharma, a Delhi-based wholesale onion trader. “However, about 30-40% of the onion we are getting in Delhi is of inferior quality, due to which the prices have increased about 40% in the past one and a half months. Inferior quality onions are mostly used by roadside eateries.”
According to data compiled by Agmarknet, wholesale onion prices in Maharashtra witnessed a month-on-month rise of approximately 34% in July, along with a year-on-year increase of 6%.
“We are going to see a wide range in onion prices. The large supply of inferior quality onions at lower price points will help to keep a check on the overall increase in onion prices,” said Danish Shah, an onion exporter from Maharashtra. “The price of good quality onions used at household level is likely to increase to INR 30-35 per kg in wholesale trade by September, which translates into a retail price of INR 50 per kg or more.”
Given the absence of a new onion crop across the nation during the monsoon period, consumers rely on onions preserved from the rabi harvest spanning March to May. These stored supplies are complemented by the fresh yield from the kharif crop, cultivated in Karnataka and Andhra Pradesh starting from September. The primary kharif harvest in prominent onion-producing states like Maharashtra and Madhya Pradesh usually commences around Diwali.
Nonetheless, this year has raised apprehensions regarding the harvest from the southern region.
“Normally we get full arrival of onions from Karnataka and Andhra Pradesh in the months of September and October. However, this year, onion cultivation in Karnataka and Andhra Pradesh is down by 60-70% as farmers cut the area due to subdued prices of the last two years,” said Shah.
The postponement of onion crop transplantation in Maharashtra, responsible for over 30% of the nation’s onion production, is also contributing to the prevailing upward trend in onion prices. This delay has raised additional concerns in the market.
“The sowing of the kharif crop has been delayed in Maharashtra. If the rainfall spoils the new crop in southern India during its harvest period, it can result in further pushing onion prices upwards,” said Shah.
