Following the government’s decision to prohibit onion exports on December 7, wholesale markets have witnessed a significant 50% decline in onion prices. Traders anticipate that prices will either stay stable or experience a slight decrease in the upcoming weeks, attributing this trend to the increasing arrival of kharif onions.
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Market data compiled by the APMC reveals that the average wholesale prices of onions at Lasalgaon AMPC have dropped to INR 20-21 per kilogram, marking a decrease from the previous INR 39-40/kg observed just before the ban on exports.
The central government first imposed a minimum export price (MEP) on onions, which was followed by the decision to impose a complete ban on exports on December 7. Onion prices started falling immediately after the export ban was announced.
According to trade insiders, onion farmers, who have been protesting for the removal of the export ban, are optimistic that the government might reconsider its decision, much like the partial revision seen in the ban on diverting sugarcane juice for ethanol.
“Onion farmers are slowly bringing their crop to the markets as they are still hopeful that the central government may revoke the ban on onion exports,” said Ajit Shah, an onion exporter from Mumbai.
Traders have noted a significant rise in the arrival of kharif onions, also referred to as red onions, leading to increased pressure on prices.
However, “good demand for onions across the country…may help keep the prices stable for a few days”, said Nandkumar Shirke, an onion trader from Ahmednagar in Maharashtra.
On December 6, at the Lasalgaon APMC, the average price of red onions stood at INR 39.50/kg, with the highest price reaching INR 45/kg. As of Tuesday, these prices have decreased to INR 21/kg and INR 25/kg, respectively. Consequently, the average price has witnessed a 47% decline following the export ban, while the highest price has dropped by 44%.
Market insiders have indicated that the data on onion arrivals in wholesale markets reveals a greater influx of kharif onions than initially anticipated by the government.
As of December 19, the Lasalgaon market, for instance, has witnessed the arrival of 3.66 lakh tonnes of red onions this month, nearly matching the total arrival for the entire month of December 2022, which was 3.69 lakh tonnes.
“We are getting good quality red onions. Crop from only those fields, which were affected by the hailstorm has been damaged,” said an official of Lasalgaon APMC who requested not to be identified.
