Onion prices up by more than 50% in 15 days, expected to rise till December: Report

The wholesale price of onions has jumped more than 50 per cent at the benchmark Lasalgaon APMC in Maharashtra in the last 15 days mainly due to a drop in the total sown area. The price has risen 18 per cent in the last one week. The average price of onions at the Lasalgaon market was Rs 38 per kg on Tuesday, up 58 per cent from Rs 24/kg a fortnight ago.

In Maharashtra, the average wholesale prices have gone up to Rs 45-48/kg in less than 10 days. In the Lasalgaon market, the average price of onions was Rs 38 per kg on Tuesday, up 58 per cent from Rs 24/kg a fortnight ago.

"The average price of onions in Ahmednagar market has increased from about Rs 35/kg about around 10 days ago to Rs 45/kg now," Nandkumar Shirke, Chairman, Association of Onion Traders of Ahmednagar District told ET. 

Retail prices of onion have increased by 25-50 per cent in the national capital region; it is currently selling at Rs 50-70/kg, the Economic Times reported. The maximum price for the best quality onion touched Rs 50/kg in Delhi on Wednesday as well as in some markets of Maharashtra. 

While low-quality onions are selling for Rs 50 per kg, medium and good-quality onions are available for Rs 60 and Rs 70, respectively. Onion prices are expected to continue to rise till December when the new kharif crop is expected to hit the markets.

The onion grown in Kharif season, which is normally harvested in October-November, started arriving in mid-September this year. Due to the 36 per cent drop to about 58,000 hectares in sowing area in Maharashtra, prices have started moving up as per experts. 

Senior officials told ET that the sowing of kharif onions in the southern states of Karnataka and Andhra Pradesh was low as farmers incurred losses in the last two years. Below normal rainfall in these states has further reduced onion production.

The prices are expected to rise till December, when the new kharif crop is scheduled to hit the markets after a delay of nearly two months, the report said.

In the month of August this year, the Centre had had imposed a duty of 40 per cent on the export of onions in a bid to arrest the rising prices due to delayed and lower sowing of the kharif crop. The levy will be in force till December 31.

In that period, retail inflation in onions accelerated to 11.7 per cent in July from 1.7 per cent in June. Along with tomatoes, onions contributed to the sharp surge in vegetable inflation last month, which shot up to 37.3 per cent in July from -0.7 per cent in June. 

The Centre also decided to increase the buffer stock limit to 5 lakh tone from 3 lakh tone in order to improve domestic availability of the kitchen staple. Further, onions from the buffer were sold at a subsidised rate of Rs 25 per kg through retail outlets and mobile vans of National Cooperative Consumer Federation. 

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