Onion prices start rising again on tight supply

Prices started rising again beyond Rs 30 per kg in the last one week and are now ruling at Rs 32 per kg at Lasalgaon

Onion prices at Lasalgaon in Maharashtra, Asia's biggest wholesale market for the staple, have started rising again due to supply concerns as the old stock has been exhausted, while the fresh kharif crop this year is expected to be 25-30 per cent lower.

Onion price, which had touched the record Rs 57 per kg in August at Lasalgoan, showed a declining trend after the Centre took several steps including hike in minimum export price and imports to boost domestic supply. It fell as low as Rs 25 per kg on October 16 at Lasalgaon.

However, prices started rising again beyond Rs 30 per kg in the last one week and are now ruling at Rs 32 per kg at Lasalgaon, as per the data maintained by the National Horticultural Research and Development Foundation (NHRDF).

A similar upward trend in wholesale onion prices was seen in Delhi and other mandis.

"This is a normal trend. The average wholesale onion price is ruling around Rs 30 per kg. At times, prices go up when arrivals are less, but rates come down as arrivals rise. We are keeping a close watch on rates," Nasik-based NHRDF Director R P Gupta told PTI.

He also said "there is no cause of worry" as more arrivals of fresh kharif crops are expected in the coming days from Maharashtra, Gujarat and Rajasthan.

Asked if there would be fall in 2015 kharif onion ouptut this year, Gupta said: "Overall kharif output would be same at last year's level. Although onion production in Maharashtra is expected to be lower due to poor rains, but that loss will be compensated in other states."

Meanwhile, farm experts and traders are projecting 25-30 per cent fall in this year's kharif output due to drought situation in the country's top two onion growing states -- Maharashtra and Karnataka.

They also warned further spike in onion prices in the coming days as about 4 million tonnes of old stock has been sold off completely and new kharif crop is seen lower.

That apart, farmers are hesitant of getting fresh produce to mandis in the wake of extreme price volatility. They are waiting for correct price signal, they added.

Onion production was 18.73 million tonnes in 2014-15 crop year (July-June). Kharif onion output contributes 20 per cent to the overall production.