Attempts by growers to dispose of their old crop and flooding arrivals pounded onion prices in markets around growing centres, particularly in Maharashtra and Gujarat, this week.
“The old crop that was held back cannot be stored any more. Therefore, farmers were trying to clear old stocks leading to huge arrivals. That resulted in prices crashing,” said Mr Rupesh Jaju, Director of Nashik-based United Pacific Agro Pvt Ltd that exports onions.
“Farmers had held back their produce expecting prices to sky-rocket like last year. But this year, the kharif crop is good despite erratic rain. With the crop running out of its shelf life, farmers have begun to clear stocks,” said Mr Madan Prakash, Director of Chennai-based Rajathi Group of Companies that exports agricultural produce.
In Pimpalgaon Agricultural Produce Marketing Committee yard, the modal price or the rate at which most trades took place dropped to Rs 600 a quintal from Rs 800 last week.
“Most of the trades are taking place in the Rs 550-630 range, though quality onions are commanding Rs 1,200,” said Mr Jaju.
Arrivals are so huge that in the last three days 30,000 tonnes have arrived in Maharashtra markets. “In Sholapur, arrivals in the last two days have been in the excess of 3,000 tonnes each, while 1,400 tonnes arrived in Mumbai on Thursday,” said Mr Jaju.
Export demand, on the other hand, is low in view of the quality that is available.
“You cannot be exporting the old crop. Sri Lanka should be buying in a big way within a month, while buying by Malaysia is normal,” said Mr Prakash.
Onion prices are likely to remain under pressure as long as the old crop is not cleared.
“Once old stocks are cleared, prices could see improvement,” said Mr Jaju.