Onion prices double in 10 days to hit Rs 80/kg in wholesale

PUNE: Onion prices have doubled in the past 10 days in major wholesale markets to Rs 80 per kg despite the ban on exports and the government’s decision on Wednesday to ease norms on imports.

Traders in the domestic market said prices will remain firm but they can rise if rain damages more crops. However, importers said prices will calm in some time because of steps taken by the government.

At some markets like Kalvanand Dindori Vani in Nashikdistrict, known for the top quality onion purchased by seed manufacturing companies, prices have touched Rs 90/kg.

In the country’s largest wholesale market for onions, Lasalgaon, the average price was Rs 62/kg, while the highest was Rs 70/kg on Thursday. At the PimpalgaonAPMC, the next largest onion market after Lasalgaon, the price was Rs 68/kg, while the highest was Rs 81/kg on Wednesday. At both the markets, the average prices have doubled in the past 10-12 days.

However, at other markets like Kalvan and Dindori Vani, the highest prices have crossed Rs 90/kg.

"The onion that is grown in the hinterland of our markets is known for its best quality and all the leading seed companies purchase our onion for the purpose of seed production," said RavindraHire, secretary, KalvanAPMC, where top quality onion has been selling above Rs 80/kg. The highest price of Rs 92/kg was recorded on October 21 at Kalvan.

Hire said that when the new red onion starts arriving in Karnataka and Alwar in Rajasthan, onion prices in Maharashtra normally begin cooling down. However, this year as rain has either damaged or delayed crops in these regions, there is good demand for Nashik onion from southern India.

Some traders said that the government’s move to relax phytosanitary norms will help bring supplies from Dubai. About 300 containers, or 12,000 tonnes of onion, are likely to reach the Mumbai port in next 10 days, said Danish Shah, a leading onion exporter.

There was a fear that the onion prices will hit Rs 100/kg. "However, the relaxation given in terms of import from Dubai will be a big psychological factor to bring the prices downwards. As the landed cost of imported onion is Rs 40 to Rs 52/kg, the wholesale prices should range between Rs 50 and Rs70/kg," said Shah.

A prominent trader based at Lasalgaon market, where income tax department officials had carried out raids this month, said that arrival of the stored onion has been good at most markets in Maharashtra as farmers are happy with the current rate. "Considering that the imports are growing and the arrival of kharif harvest has begun on a very small scale at some places, unless there is some aberration caused by the rainfall, prices should not increase further," he said.