After a brief period of stability, onion prices across wholesale markets in Maharashtra have started rising again, and market sources say the trend will continue till the new crop arrives in early November.
Traders attribute the rise in prices to a disruption in the supply chain, caused by heavy rain in the last week of August, which affected the quality of stored onions in Madhya Pradesh and Gujarat.
This supply crunch comes even as the country has reported 9.90 lakh hectares of onion acreage for the 2019-2020 rabi season, as against 7.70 lakh hectares in the 2018-2019 rabi season.
Onion prices had started the year on a high note, as excess rain had caused extensive damage to market-ready crops in Maharashtra, Madhya Pradesh and other onion-growing states. At Lasalgaon’s wholesale market in Nashik district’s Niphad taluka, average prices were in the range of Rs 4,500-5,500 per quintal, which cooled down considerably after the new crop arrived in March.
Following a bumper kharif, harvest prices stumbled to Rs 1,498 per quintal in March, which further corrected to Rs 730 per quintal by July. Wholesale prices of the kitchen staple firmed up to Rs 1,00 per quintal in August, which further increased to Rs 1,968 in September.
Explaining the present trend, Suresh Deshmukh, an onion commission agent, who operates at Nashik’s Dindori wholesale market, said this was mostly due to the destruction of poor-quality stored onions in Madhya Pradesh and Gujarat. “Heavy rain in August has led to moisture ingress in stored onions and their quality has deteriorated. Even in Nashik, farmers have reported moisture damage to their stored onions,” said Deshmukh.
Nearly 80-85 per cent of the produce was of below average quality, and prices have been increased to attract better-quality stored onions. “While a bumper crop had subdued the markets post March, this rain-induced damage has again hiked the prices,” said Deshmukh.
Heavy rain has also affected standing crops in Nashik and other onion-growing regions, said Jaydutt Holkar, chairman of Lasalgaon’s wholesale market. “We feel the new crop will also be affected and the present price trend can continue for quite some time,” he said.
How onions are stored
Onion growers tend to store their winter or rabi crop in on-field dust-proof and moisture-proof structures called kanda chawl to prevent the growth of green shoots. This stored onion forms the supply chain to markets till the kharif crop arrives in early November.
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