India: High onion prices see farmers harvesting pre-mature crop

The sowing of onions in the kharif season started with the monsoon rains, which were delayed by around two months. In a rush to avail of the price rise, onion farmers in major growing regions have started harvesting pre-matured kharif crops. This, however, may have more implication on the year ahead, compared to this year. Experts believe pre-matured harvesting would reduce shelf life, resulting in higher spoilage. This could lead to a shortage next season, they say. In the Agricultural Produce Market Committee in Vashi, fair average quality onion was quoted at Rs 1,300-1,400 a quintal yesterday, compared with Rs 600-700 a quintal at the beginning of this month. In the benchmark Lasalgaon market in Nashik, onion was quoted at Rs 1,200-1,400 a quintal yesterday, compared with Rs 500-600 a quintal on October 1.

“To fetch higher realisation for their produce, farmers have begun harvesting pre-matured onion crops. Since the seed was sown with a delay of two months, the onion crop is set to mature with a similar delay,” said R P Gupta, director of the National Horticulture Research & Development Foundation (NHRDF). Meanwhile, with the onset of the festive season, demand has surged. The supply, however, has been squeezed to a quarter in major mandis, owing to markets being closed due to various festivals. And, supplies to mandis are restricted, despite the adequate availability of onion stocks in warehouses. Markets in West Bengal remained closed for four days on the occasion of Durga Puja. In other states, too, markets were closed, owing to the Durga Puja and Bakri-Id festivals. Therefore, truckers remained off roads throughout the week, leading to a drop in supplies to mandis.

Overall arrivals in the Vashi mandi were reported between 50-60 trucks (an average of 15 tonnes each), compared with 180-200 trucks in the beginning of October. In the Lasalgaon market, too, onion arrivals fell steadily to 200 trucks yesterday, compared with 400 trucks early this month. Sanjay Sanap, an onion trader based in Lasalgaon, said the commodity's supply eroded over the last few weeks on delay in harvesting this season. Since the new crop is set to hit mandis only after two months, the market would remain firm till then, he added. He estimates onion prices for retail consumers would touch Rs 1,600 a quintal (Rs 24-26 a kg) soon.

According to Gupta, enough stock is available to meet the demand gap till the arrival of new season crop. “There is no fundamental reason for the sudden escalation in onion price. There is no report of crop damage. We are estimating a fairly good crop this season. However, prices are rising,” he added. Annual onion demand in India, according to NHRDF, stands at about 15.7 million tonnes — for domestic consumption, as well as exports. Yusuf Rizvi of Rizvi Exports has attributed the rise in prices to the sudden rise in export demand.

Source: www.business-standard.com