Onion prices have increased by 28 per cent over the past month despite record arrivals month-on-month and year-on-year.
According to data from Agmarknet, an arm of the Ministry of Agriculture, the modal price of onion — the rate at which most trades take place — at Asia’s largest market for the commodity in Lasalgaon is ₹1,725 a quintal against ₹1,340 on July 8.
On the other hand, arrivals between July 1 and August 7 at agricultural produce marketing committee (APMC) yards across the country are 22.33 lakh tonnes, a record, compared with 18.25 lakh tonnes during the same period a year ago.
Lower output estimate
A look at the arrivals from April 1 to August 7 also shows record arrivals of the commodity across APMC yards in the country. According to the Ministry of Agriculture, onion production during the 2022-23 crop year that ended in June has been estimated at 31.01 million tonnes against 31.69 million tonnes in 2021-22.
Data from the Ministry of Consumer Affairs show that onion prices are up 5 per cent month-on-month at ₹27.7 (₹26.21 a month ago). Year-on-year they are up 15 per cent. “Prices are up by ₹3-4 over the last week as domestic demand is good. It will take another week or so before we can draw any conclusion on how the prices will move,” said Ajit Shah, President, Horticulture Produce Exporters Association (HPEA).
“Onion prices have increased over the last two weeks to a range of ₹16-25 a kg depending on quality. There seems to be some shortage as the material does seem to be coming,” said Vikas Chaudhary, an exporter from Nashik.
Slack export demand
“Onion prices are rising since the quality of arrivals are not up to the mark. Rains in April-May in Maharashtra seem to have damaged the stocks,” said M Madan Prakash, President, Agri Commodities Exporters Association (ACEA). “There is some damage to cargoes stored but the quality of onions in warehouses is good,” said HPEA’s Shah.
On the other hand, export demand is slack, he said. “Prices are unchanged in the global market, particularly in the Gulf and Colombo markets. Pakistan is selling at a competitive price,” said Chaudhary. “There is no market abroad now. You have to pay more for quality onions,” said ACEA’s Prakash.
Onion prices could stabilise in 15-20 days time when the Karnataka crop hits the market. “The crop should have arrived by now and we would have begun exporting. But this year, the crop has been delayed as sowing was late. We are told the quality of the crop is good,” he said.
Looking to cover storage costs
Shah said a clear picture on the Karnataka crop will emerge in 20 days. “Right now, the rise in onion prices is normal. Usually, prices tend to rise during July-August as it is a lean season for arrival,” he said.
Chaudhary expects prices to rule firm for 1-2 months. “Farmers are also looking for higher prices,” he said.
Shah said farmers are looking for prices that will cover their warehouse storage costs too. “People have good stocks. They are looking for costs that will compensate them for keeping the stocks since April,” he said.
Current onion prices are at a par with rates seen in 2021 but lower than the quotes seen in 2017, Agmarknet data show.