The month of Sawan is about to end, and just ahead of the festive season, onion prices have once again gone up in the country, affecting the kitchens of ordinary people. The rise in prices of not only onions but also vegetables and Chinese imports is straining the budget of ordinary people, forcing the central government to take drastic steps to transport its buffer stock to states with high onion consumption, including running the Kanda Express. The answer to the question of why onion prices have surged is that it is not due to a sudden increase in demand but rather due to the depletion of old stocks and the delay in the arrival of a large onion crop.
As per the updates from the Department of Consumer Affairs, the national average retail price of onion reached nearly Rs 42 per kilogram on August 22, a 45 per cent increase from a year ago and a 19 per cent increase from the previous month. Retail prices in Delhi reached Rs 65 to 70 per kilogram, compared to Rs 35 per kilogram a few days ago. These are retail prices; the jump in onion prices in wholesale markets is even greater.
Citing data from the Department of Agriculture and Farmers Welfare, Agrospectrum India reported that the average wholesale price of onion was Rs 2,897.64 per quintal on August 18. This was 31.93 per cent higher than a week ago, 43 per cent higher than a month ago, and 118.37 per cent higher than a year ago.
Why have onions suddenly become expensive again?
The main reason for this is that the old Rabi crop is ending and the Kharif crop is awaited. Onion supply in India depends on the seasonal cycle. The Rabi onion crop, harvested around March-April, is the country’s main storage crop and supplies the market for several months, generally until October. As the cold storage crop depletes, the market becomes increasingly dependent on fresh supply from the next harvest.
Onion price rise: Impact on supply
According to The Economic Times, Rabi onions stored in March and April are the main source of supply until October. Meanwhile, small supplies of Kharif onions from Karnataka, Telangana, and Andhra Pradesh help fill the gap before the main Kharif crop arrives in October. This year, this transition is proving difficult as stored onions are running out. The quality of stored Rabi onions has also been affected.
Delay in the next Kharif crop
The next major source of relief for onion prices is the Kharif crop, but its arrival is being delayed. According to The Economic Times, the delayed arrival of the monsoon in Maharashtra has delayed Kharif sowing. This could delay the arrival of the Kharif crop from the Nashik region, making supplies from southern states even more crucial in the meantime and potentially impacting prices.
When will onion prices come down soon?
This will largely depend on when and how much the next crop arrives. According to a Hindustan Times report, experts believe onion prices may remain high and reach their peak around September-October. By this time, Rabi crop stocks are expected to be depleted, and the arrival of the new Kharif crop may still be delayed. Therefore, the weather in the coming weeks will be crucial.
The Economic Times quoted onion exporter Danish Shah as saying that the weather in September will be a key factor; rain damage could further increase prices, while good quality supplies will help keep prices in check. The government’s buffer-stock initiatives may provide some immediate relief, especially in cities where there are large price differences. However, the future outcome will depend on the quantity and quality of the new crop.
In the wake of these developments, the Centre has started moving bulk onion stocks through dedicated railway rakes – the ‘Kanda Express’ – from Nashik in Maharashtra to major consuming centres, as part of efforts to augment supplies and check the seasonal rise in prices, a consumer affairs secretary, Nidhi Khare, said on Monday. Stocks currently being loaded onto these rakes are expected to reach the identified centers by Wednesday, she said.
Data shared by the ministry shows the all-India average retail price of onion rose 59 per cent year-on-year to Rs 43.53/kg on August 24, from Rs 27.37/kg a year ago. The average wholesale price was up 68 per cent at Rs 35.58/kg, against Rs 21.23/kg in the year-ago period.
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