Given the high prices of onions in recent weeks, the Central government has decided to upscale the disposal of the bulb, including offloading buffer stocks. A press release from the Ministry of Consumer Affairs, Food & Public Distribution said on Tuesday (November 12), “The government is alive to the market developments and keeping close watch to take ameliorative action to stabilise the onion prices.” The All India Modal (average) retail price, as reported by the Price Monitoring Cell (PMC) of the Ministry of Food and Civil Distributions, showed onion prices at Rs 60 Markets in Pune, Delhi, Chandigarh and some other cities have reported prices above Rs 100 What is behind the hike and can consumers expect relief soon? We explain. Why are onion prices rising? The price rise has come after a long period of near-steady onion prices for most of the year. Traders in the wholesale market of Maharashtra’s Nashik, the largest onion-producing district of India, said the current situation is entirely temporary and caused by a dip in supply from the farmers’ end. “The old stock from last year’s rabi season, harvested by farmers in March 2024, is almost over and the new stock is yet to hit the markets. This supply-demand mismatch is the reason for the price rise,” said a trader from the Dindori wholesale market in Nashik. At the district’s Lasalgaon wholesale market, the largest onion market in the country, the daily arrival of onions is between 200-250 tonnes. Last year, this figure was around 1,000 tonnes. When will onion supplies be restored? Onions are grown in three cycles in a year. Farmers in Maharashtra sow their kharif onion crop in June and July, harvesting it from October onwards. However, this process was delayed due to a spell of rain in mid-October and Diwali falling at the end of October this year. Another crop, the late kharif, is sown between September and October and harvested post-December. The all-important Rabi crop is sown from December to January and harvested after March. Harvesting of the kharif crop was greatly impacted by the October rains. Across India, reported kharif sowing was over 3.82 lakh hectares against last year’s 2.85 lakh hectares. Late kharif sowing was over 0.55 lakh hectares, compared to 1.66 lakh hectares in 2023. Traders expect the prices to stabilise in the next 10 days, following harvesting and the restoration of normal supplies. What is the outlook for onions? Given the higher-than-average acreage devoted to the kharif crop, traders feel prices may significantly dip in the next few days. Although, with lower-than-usual late kharif sowing, the trend may not hold — especially in the coming year. A lot rests on farmers’ ability to raise enough nursery beds for the rabi crop. Notably, export demand for the Indian onion has risen lately in countries like Sri Lanka, the United Arab Emirates (UAE) and Bangladesh. However, traders say the quantity at present is inadequate to meet their demands. Could high onion prices become an election issue in Maharashtra? Maharashtra State Assembly elections will be held on November 20. While consumers might dislike the high prices, the wholesale price rise could be a blessing for the ruling Mahayuti government. During the Lok Sabha elections, the Mahayuti lost five of the six Lok Sabha seats in the “onion belt” of Dindori, Nashik, Beed, Aurangabad, Ahmednagar and Dhule seats. The region accounts for around 34% of the country’s onion production. A complete ban on onion exports, with exceptions for some countries, was perceived as one of the main reasons behind the anger among onion farmers. The export ban was lifted soon after the elections, following which prices stabilised in the wholesale markets.
