Onion prices rise to two-year high in parts of India

A steady decline in last year’s inventory has propelled onion prices to a two-year high in wholesale mandis in major producing regions in Maharashtra, India. 

The price increase has spilled over from Maharashtra to other states and has led to reduced consumption.

Data compiled by the Nashik-based National Horticulture Research and Development Foundation (NHRDF) showed the price of onion at Rs 28.64 a kg in Asia’s largest onion mandi in Lasalgaon on Monday, a decline from Rs 29.54 a kg on November 2. Prices here have increased by Rs 8.44 a kg, or 42 per cent, over the last month. Two months ago, onion prices were around Rs16.45 a kg, nearly half the current price, in Lasalgaon. 

The price surge was similar in major mandis in Gujarat, Delhi, and Rajasthan. This price level for onions has not been seen since October 2015.

Onion consumption has declined with retail prices of Rs 60 a kg in Mumbai and Rs 50-55 a kg in Delhi. The sharp rise in onion prices is attributed to a harvest delay in Karnataka due to unseasonal rainfall in October.

“Normally, the early Karnataka crop starts arriving in mandis in the second fortnight of October. This year, the early harvest is delayed by late sowing. Supply is not expected before early December,” said Sanjay Sanap, a wholesale onion trader in Lasalgaon.

Traders estimate only 40 per cent of the usual area was sown in Karnataka this year due to unseasonal rain, which also reduces onion productivity due to high soil moisture. Karnataka contributes nearly 15 per cent of the early onion crop. The crop in Maharashtra is delayed as well.

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