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This is an archive article published on September 16, 2005

Onion prices to stay high till October-end

The kharif crop in Maharashtra would arrive after October 15, till then the situation would continue,’’ said the The joint directo...

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The kharif crop in Maharashtra would arrive after October 15, till then the situation would continue,’’ said the The joint director of the National Horticulture Reseach and Development Foundation, Dr Satish Bhonde.

The new crop should have arrived earlier, but this year the cultivation schedule in Maharashtra — which has the highest yield — has been delayed by over a month due to heavy rains.

The delay in harvest, coupled with the high humidity that spoils the already depleting stocks, have sent the prices skyrocketing.

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‘‘Prices in the wholesale markets have touched Rs 1,000 per quintal and are likely to remain in the range of Rs 800—Rs 900 per quintal,’’ said the vice-chairperson of National Agricultural Cooperative Marketing Federation (NAFED) Changdevrao Holkar. The consumers in cities will have to pay around Rs 15 per kilo in the retail markets.

This year, the conditions have been worsened due to hoarding by the traders and farmers. Since onions are no longer on the list of essential commodities, no legal action can be taken against them.

‘‘The situation could have been even worse,’’ Holkar pointed out, ‘‘but onions have started arriving from Karnataka. The kharif crop from Rajasthan is also expected by the second week of October. There is no need for panic. The situation is not as bad as in 1998, but consumers would have to pay a higher price for some time’’.

This year, the export of onions have been marginal as well.

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‘‘Against the usual 30,000 to 40,000 tonnes per month at this time of the year, the exports are only around 4,000 to 5,000 tonnes,’’ Holkar said.

Most states have two crops of onion per year — rabi (summer) and kharif (monsoon). Maharashtra, Gujarat and Orissa have three crops — the third being the late kharif. The summer crop, harvested around April, has a shelf life of about six months. It takes care of the market needs till September, when the kharif crop arrives. The kharif crop is highly perishable, but it lasts till the late kharif arrives. This crop, harvested around December, lasts till the rabi crop is ready in April.

ONION THE KINGMAKER

The current onion scarcity is nowhere near the crisis in 1998, when wholesale prices reached an alltime high of Rs 4,000 per quintal. The prices in the retail market were around Rs 60 per kilo.

The Centre had to ban onion exports and it was included in the list of essential commodities.

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The Bhaba Atomic Research Centre was asked to create an irradiation centre at Lasalgaon to treat onions to increase their shelf life. Ultimately, the BJP, which was in power at the Centre, lost the assembly polls in four states — and the defeat was attributed to the onion.

Maharashtra saw the reverse in 2000. The commercial success of traders in 1998 had prompted farmers to create their own storage facilities with government aid. And this time, they took to hoarding.

But 2000 saw a bumper crop. With an yield of 54 lakh tonnes, the onion prices nosedived to Rs 250 a quintal. The glut came at a time when the Congress-led Democratic Front (DF) government had come to office routing the Sena-BJP combine.

The new government, eager to please farmers, launched the market intervention scheme and bought onions for Rs 350 per quintal and in process, suffered a loss of about Rs 110 crore. Moreover, there were no takers for the onions it had bought.

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Attempts to distribute them through the Public Distribution System failed, as the market prices were lower. Finally, 6.16 lakh quintals of rotting onions had to be dumped.

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