Dwindling stocks to make onions pricier from Sept

Onion prices will tend to surge in September as stocks from the rabi crop are expected to be exhausted by then.

In addition, delay in the onset of the South-West monsoon will result in kharif onion harvest being delayed by at least a fortnight.

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Rabi onion, which has a longer shelf life of nearly six months, will last till the middle of August. After that, availability of onion is a question and prices will tend to rise then,” said CB Holkar, a farmer leader and member of the National Cooperative Agricultural Marketing Federation (Nafed). “Stocks are available from the rabi crop but the question is how long will they last,” said RP Gupta, Director of the National Horticultural Research and Development Foundation.

Record crop

A record crop of 19.2 million tonnes of onion is seen providing some relief to customers this year. Production has gone up 14 per cent over last year.

Last week, the modal price or the rate at which most trades took place in onion increased to ₹1,360 a quintal at Lasalgaon Agricultural Produce Marketing Committee yard, Asia’s largest market for onion, against ₹1,000 throughout last month. On Monday, prices had cooled to ₹1,290.

However, prices are ruling around ₹25 a kg in retail outlets.

“Currently, onion is coming from the stocks stored by traders and farmers. There are costs attached to storage, loading and unloading. Therefore, it is natural for prices to rise,” said Gupta.

“Also, we have to take into account the loss in onion weight due to dryness,” he said.

“The kharif onion crop in Karnataka will arrive in September but it is a smaller one and is unlikely to meet the demand,” said Holkar.

Going by the slow pace of planting due to monsoon setting in late, the crop in Maharashtra, India’s largest onion producing State, is likely to arrive only in October.

“This delay will psychologically lift prices,” said Holkar.

Lack of seeds

On the other hand, onion growers are hurt by non-availability of quality seeds.

“Quality seeds are not available as onions got damaged due to unseasonal rains last October. Some farmers are planting old seeds. All these could result in onion acreage decreasing during the kharif season,” Gupta said.

According to Holkar, onion seeds are currently costing ₹3,000 a kg. “In normal circumstances, prices don’t exceed ₹400,” he said.

The Government’s move to fix a minimum export floor price of $300 a tonne will also help soften prices a little, said Holkar.

“The minimum export floor price will help because China is selling at $300 a tonne c&f and Pakistan is offering consignments at $250-300,” Holkar said, adding that still Indian onion could find some takers as there are people who prefer it for its unique pungency. There are signs that the supply situation could improve in the years ahead with Madhya Pradesh emerging a key onion producer.

The central State’s production in the current season ending this month is estimated at 2.83 million tonnes (mt) against 1.02 mt during 2010-11.

During the same time, Maharashtra’s production increased to 5.86 mt from 4.90 mt.

“Madhya Pradesh is emerging an important supply factor of late,” said Gupta. “Madhya Pradesh onion goes up North and the southern States still tend to depend on Maharashtra onion,” said Holkar.

Meanwhile, Nafed purchased 30 tonnes of onion on Friday for supply in Delhi at an average ₹1,550 a quintal.