Onion prices at Lasalgaon, the country’s largest wholesale market for the vegetable, surged on Thursday to touch a high of ₹2,300 per quintal on tight supplies. The modal prices have almost doubled over the past two days and more than quadrupled since early July, when prices hovered around ₹500.
Prices across the country are expected to flare up as the demand for Maharashtra onions has picked up on a shortfall in supplies from Karnataka and Andhra Pradesh due to deficit rainfall, which affected production in these States. On the other hand, excess rainfall in Rajasthan and Gujarat has reduced supplies from there, contributing to the price surge, traders said.
Maharashtra has for now emerged the primary supplier and will remain so for the next couple of months. “Traders and growers in Maharashtra, who are aware of the weak supply situation in other States, have begun hoarding onion, triggering a price spike,” said Saleem Byahatti, Secretary of the Onion and Potato Traders Association in Hubbali, the largest market in North Karnataka.
“Maharashtra still has about half the rabi produce, while fresh supplies have shrunk from Andhra and Central Karnataka,” Byahatti added.
In Central Karnataka districts such as Chitradurga, onion planting has been hit by not only poor rains, but also due to the declining water table as the region has been hit by consecutive droughts. “Only 25-30 per cent of the crop in this region is available, and supplies are expected later this month. Supplies of new crop from Kurnool region in Andhra are also down drastically due to weak rains. As against a normal supply of 150-200 truckloads, we are getting only 10-20 trucks,” Byahatti said.
Imports in the offing?The surge in prices has led private traders to explore the option of importing onion from countries such as Egypt, Byahatti said. Traders also attribute the price spike to the Madhya Pradesh government’s unprecedented decision in early June to procure about 5 lakh tonnes of onions from farmers at ₹800 per quintal, which took away the surplus.
Besides procurement by MP, the floods in Gujarat and Rajasthan have also hurt supplies, said Purshottam Chothani, a trader in Lasalgaon. Onion supply from Karnataka had fallen due to drought-like conditions and lesser acreage under onions, he said.
(With inputs from Rutam Vora in Ahmedabad)