Production, storage improve- Onion prices subdued ahead of sensitive season

Production, storage improve: Onion prices subdued ahead of sensitive season

Thanks to a rise in onion production and an improvement in its storage facilities at the farmers’ level, prices of the staple vegetable, a political hot potato, are unlikely to see any big fluctuations this year. And if things shape up as planned by the policymakers, the seasonal spike in onion prices in various pockets of the country during October-November may become a thing of the past, according to official sources.

Currently the benchmark onion price at Lasalgaon, Maharashtra is Rs 1,220/quintal down 20% from a year ago, and way lower than the last three years’ seasonal average of Rs 2,354/quintal.

Misal said that three years back mandi prices rose to Rs 3,000 a quintal in October which is currently ruling around Rs 1,100-1,200 quintal across key producing states. He said that prices are expected to stabilise at the current level as the kharif harvest will enter the market by the end of October.

Rabi onion harvested during April – June accounts for around 65% of the country’s onion production and meets the consumer’s demand till the kharif crop is harvested in October-November. Kharif harvested onions are not stored because of higher moisture content thus entering the market directly.

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“Onion prices do not witness a sharp spike in October or November as it used to a couple of years back as production has increased along with storage infrastructure,” Uday Devlankar, former adviser to the Maharashtra agriculture prices commission and a farmer said.

The modal retail price of onion is currently around Rs 20/kg which was prevailing at Rs 30/kg a year back. In December 2019, retail onion prices touched Rs 100 a kg in many cities, resulting in the government’s ban on onion exports.

India exported 1.4 million tonne (MT) of onion valued at Rs 1,301 crore in 2021-22. Bangladesh and Malaysia had 46% and 12% share in total onion exports respectively in the last fiscal.

An official said since January 2021, there has not been any ban on onion exports as used to be a few years back.

In August 2022; onion price inflation was down 18.48% on the year.

Negative onion inflation in August 2022 was due to a bumper output of 31.7 MT in the 2021-22 crop year (July-June), against 26.6 MT in 2020-21.

The government had procured 0.25 MT of onion for the buffer stock in 2022-23 against 0.2 MT purchased in the previous year.

The onion stock was procured through farmers’ cooperative NAFED from farmers through the Farmer Producer Organisations in rabi onion growing states of Maharashtra, Gujarat and Madhya Pradesh.

“The price stabilisation through buffer stocks serves the twin objectives of providing remunerative prices to onion farmers and augmenting the availability of onions at affordable prices to the consumers,” a department of consumer affairs note stated.

An official said open-market releases of onion from buffer stocks are being released in those states/cities, especially in the northeastern states where prices show an increase over the previous month.

To address the post-harvest losses of onions including losses incurred from inefficient storage and processing, the department of consumer affairs has announced a grand challenge for the development of ‘technologies for primary processing, storage and valorisation of onions.’