Onion prices sky-rockets, up 30-50% in just two weeks: Report

As demand for onions ahead of Eid-al-Adha (Bakra Eid) has increased, the prices of the commodity have risen by almost 30-50 percent in the last two week.

Now, hoping that the central government might soften its measures and interventions, largely for controlling rising prices, traders have started hoarding the onion stocks, according to an Economic Times report. 

At a mandi in Nashik, the base wholesale price of one kg onions stood at Rs 26/kg on Monday. This price was up from Rs 17/kg reported on May 25.

On the other hand, top-quality onions are now being sold at more than Rs 30/kg across several wholesale markets in Maharashtra. These top-quality onions are high-priced even though they make up a small proportion of the total trade volume. 

According to the ET report, the main reason behind this surge in price is the disparity between the demand and supply.

Farmers and stockists are hopeful that the government would eliminate the export tariff, according to Ajit Shah, head of the Horticulture Produce Exporters' Association.

"One of the main reasons for the prices to go up is that the farmers and stockists are optimistic that the central government may remove the export duty. Based on this assumption, they are holding onions expecting the prices to go up," Shah said

Onions are supplied from inventories kept by farmers and dealers and arrive in marketplaces starting in June. Due to the expectation of higher prices resulting from a projected decline in the rabi harvest for 2023–2024, farmers are hesitant to sell from their inventories.

Onions continue to be in high demand domestically despite slow exports brought on by a 40% export levy, especially as Eid-al-Adha approaches on June 17.

"There is strong demand for Maharashtra's onions, especially from the southern states," said Vikas Singh, an onion trader from Nashik in Maharashtra, told ET.