Onion prices to rocket this Diwali

This Diwali, it won’t just be the rockets going up. There’s grim news from the country’s onion bowl: prices of onions are all...

This Diwali, it won’t just be the rockets going up. There’s grim news from the country’s onion bowl: prices of onions are all set to climb dizzying heights for a while.

And you can blame it on two factors: there will no auction of the produce for 13 days, October 22 onward, because all wholesale marketyards will be shut for Diwali; but more importantly, the early kharif from south Maharashtra has been hit for want of rains while bad weather has delayed the crop from Andhra Pradesh and Karnataka. Making it worse, Nashik’s kharif crop is yet to hit the market.

With no auction at all APMCs (agriculture produce marketing committees), prices are likely to soar as traders and middlemen get into the act to call the shots: summer stocks, harvested during April-May, are depleting and hoarding will begin.Prices have been rising steadily in the last three weeks — from an average of Rs 500 per quintal to a high of Rs 1,125 per quintal on October 13 before stablising around Rs 700 per quintal. But retail prices in cities like Mumbai range between Rs 18 to Rs 20 per kilo because the produce passes through middlemen before reaching the consumer.

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Former Maharashtra minister and sitting Nashik MLA Daulatrao Aher of the BJP today called for immediate market intervention by the state government to prevent the situation from spinning out of control. According to Aher, the government should buy onions before the markets close for Diwali and store these for distribution in cities and towns. He urged the Centre not to ban export of onions as it did in 1998 because bulk of the new kharif crop is due for harvesting within a month.

If exports were banned, he said, there would be a glut in the market within a month and the farmer would be the loser as prices would collapse. He pointed out that the ban imposed on onion exports in 1998 had been lifted only three months ago and of the 9 lakh tonnes earmarked for exports, only 5.5 lakh tonnes had been exported.

The wholesale prices of onions at Lasalgaon APMC for the old stocks of summer onions were between Rs 301 to Rs 851 per quintal today (the average being Rs 652 per quintal). The new kharif crop has started arriving in small quantities and their prices ranged between Rs 351 to Rs 925 per quintal, the average being Rs 725 per quintal.

This situation is likely to prevail for a month before the new kharif crop enters the market to tide over the problem. Since the kharif crop has a shelf life of about six weeks (unlike the summer crop that can be stored upto six months), it will have to be sold before it rots, bringing down prices.

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