Prices of onions, a staple in most Indian households, has skyrocketed, touching as much as Rs 80 per kilo in some places including Delhi. The price has shot up to around Rs 60 per kilo in Bengaluru, Rs 60 in Vijayawada, around Rs 45 in Hyderabad and Chennai. This situation has reportedly been compounded due to higher rainfall and lesser yield. Prices have reportedly jumped by as much as 76%.
While these are the retail prices, the price has increased in wholesale markets as well. In Mumbai and Delhi retail markets, prices are reportedly as high as Rs 75-80.
Union Food and Consumer Affairs Minister Ram Vilas Paswan said on Tuesday to people who were hoarding stock that the government had enough buffer stock. “I want to inform hoarders that we have a buffer stock of 50,000 tonnes. Affected states can boost their supply through agencies like Nafed and National Cooperative Consumers Federation Ltd.” Nafed is the National Agricultural Cooperative Marketing Federation of India Ltd. The government is offloading its buffer stock to combat the situation.
Union Agriculture Minister Narendra Tomar said, “Onion situation will improve in the next few days. Cooperative Nafed is releasing stock from the central buffer at a lower price. We have enough stock of onions.”
According to Business Today, wholesale prices are at a four-year high. Prices began spiking in some markets at the beginning of the month. According to the Hindustan Times, on September 13, the union government set a price floor for exporting at $850, below which traders are not allowed to export.
“Each of us usually sells up to two ton of onions per day. But the stocks have now reduced to three ton per week. This has affected the price,” K Malleswara Rao, a wholesale trader from Gollapudi market told the Times of India.
Why prices are soaring
Maharashtra is the largest producer of onion, and with years of crop losses along with this year’s monsoon possibly exacerbated the situation. Onion is primarily produced in Maharashtra, Karnataka, Gujarat, Bihar, Madhya Pradesh and Andhra Pradesh. Many of these states witnessed heavy rainfall this year.
"Last year farmers grew only half of the usual production. The heatwave in May and subsequent heavy rains this year left only 50% of the crop," Hiraman Pardeshi, an onion trader in Nashik told India Today TV.
Nanasahed Patil, the director of Nafed told Business Today that harvest was low, and heavy rains have damaged crops. “Heavy rains in southern states, Madhya Pradesh, Uttar Pradesh, Gujarat and Maharashtra damaged the crops and the new onion crop that comes in September has been delayed by a month," he said.
An official of the National Horticultural Research & Development Foundation told HT that September is usually the month when the stock of the previous harvest is finished off, and the stock from the new harvest starts coming in in late November.
“Supply during this seasonal lean period is made good by stored stocks,” the official said.
According to reports, prices are expected to go up further.