Onion prices crash as new crop arrives

Onion prices crash as new crop arrives
EXPRESS NEWS SERVICE

NASHIK, DEC 15: The prices of onions have crashed by about Rs 2 per kilo in the Lasalgaon wholesale market --- the country's largest onion marketyard --- with the arrival of the delayed kharif crop. Average wholesale prices were around Rs 6 per kilo till last week.

However, with arrivals of the fresh crop, prices have dipped to around Rs 4 per kilo. The crash in prices has annoyed farmers, who disrupted auctions at the Lasalgaon Agriculture Produce Marketing Committee (APMC) this week, withdemands for higher prices. Similar protests were also witnessed at the Manmad APMC.

The harvesting of kharif onions usually done in October-November was delayed by a month this season owing to a three-week-long dry spell. Stocks of rabi onions (harvested in April-May) had depleted and the new crop was yet to arrive. As a result, wholesale prices had shot up from Rs 4-5 per kilo to Rs 6-7 per kilo last month.

With the harvesting of the new crop, arrivals have nearly doubled from 60,000 quintals to over 84,000 quintals per week in the Lasalgaon APMC. The wholesale prices, which were in the range of Rs 6-7 per kilo last week have now dropped to Rs 4 per kilo.

It may be recalled that the failure of the kharif crop in 1998 due to inclement weather conditions, had led to a shortfall in onion production, pushing up prices to an alltime high of upto Rs 40 per kilo in the wholesale markets. As against normal production of about 42 lakh tonnes in the country annually, production was merely 34 lakh tonnes.

However, a good weather led to a bumper harvest last year and the onion production went up to about 55 lakh tonnes in the country. It led to a crash in prices up to Rs 2 per kilo, prompting farmers to agitate for remunerative prices. The Maharashtra government had procured onions at higher than market prices to provide relief to farmers. As against the market rate of Rs 2 per kilo, the government procured onions for Rs 3 and Rs 3.50 per kilo. In the process the government suffered a loss of about Rs 100 crore. The procured onions could neither be exported (as the Gulf markets were flooded with cheaper onions from China and Pakistan as the Indian government had banned exports of the commodity) nor could be distributed through the public distribution system as they were available for Rs 5 in ration shops as against Rs 3 in the open market.

onsequently, about 2.5 lakh quintals of rotting onions had to be dumped. This year, the delay in the harvest of the kharif onions did not have much effect on the prices (like in 1998) as the bumper rabi crop (harvested in April-May) ensured supply of the commodity. Officials have predicted a shortfall of 30 per cent in the kharif production this season and an overall deficit of ten per cent this year.