At the start of the Diwali season, onion prices in retail and wholesale markets have seen a sharp correction due to the influx of imported bulbs, according to traders.
Market estimates say at least 28,000 tonnes of onions from Iran, Afganisthan, Turkey and other countries have arrived in India and absorbed mostly by the hotel and restaurant sector. However, delay in the arrival of fresh crop can raise onion prices over the following weeks, experts said.
After touching the year’s high at Rs 7,100 per quintal at Lasalgaon’s wholesale market on October 20, onion prices saw sharp corrections in the last few weeks due to imposition of stock limits and easing of imports, market sources said. The central government had reintroduced stock limit restrictions on onion on October 24 after export bans and easing of imports had failed to bring down prices.
Ajit Shah, president of the Onion Exporters Importers Association of India, said the landed cost of the imported bulb in the country is Rs 4,000 per quintal. “Such arrivals are helping bring down prices,” he said.
The average traded price at Lasalagaon’s wholesale market is now Rs 3,500-4,000 per quintal. On Monday, the bulb traded at Rs 4,200 per quintal.
Traders expect prices to rise on Wednesday, the last trading is to take place before markets close for their annual 10-day Diwali vacation.
But in the long run, onion prices could rise again as the new kharif or late kharif crop is likely to be delayed by more than a month.
Suresh Deshmukh, a commission agent at the Dindori market, said the late kharif crop will be arriving in the markets only in late December as against the initial estimates of late November. “The unseasonal rains during the withdrawal of monsoon have heavy damage to the kharif and the planting of late kharif crop. At present, farmers are bringing in immature or damaged onions to markets,” he said. While imports have cooled down prices, Deshmukh said the effect would only be temporary. “We forsee another price rise before the new crop hits the markets,” he said.