The escalation of onion prices is causing growing concerns about rising household expenses and the potential for increased inflation. Government data from October 25 indicates that the maximum retail price of onions has surged to around Rs 70 per kilogram, and this upward trend is anticipated to persist until December when the kharif crop enters the market.
According to information from the Department of Consumer Affairs, the average wholesale price of onions as of October 26 has climbed to Rs 3,112.6 per quintal, marking a significant increase from the Rs 2,506.62 per quintal observed on October 1.
More specifically, the average wholesale price at the Lasalgaon Wholesale APMC in Maharashtra has surged by nearly 60 percent in the past two weeks, as reported by The Economic Times. This surge in wholesale prices has had a profound impact on retail onion prices across the country, with rates exceeding Rs 50 per kilogram in many regions.
In the National Capital Region (NCR), onions are now being sold at Rs 50-60 per kilogram in various markets, including online grocery stores. This marks a substantial hike from prices observed just two weeks ago.
Nandkumar Shirke, Chairman of the Association of Onion Traders of Ahmednagar District, shared with ET that the average onion price in the Ahmednagar market has risen from Rs 35 per kilogram around ten days ago to Rs 45 per kilogram at present.
It's important to note that this price surge is occurring despite the central government's imposition of a 40 percent export duty on onion exports in August to address rising demand and delayed production. The government had also initiated the sale of onions procured by the National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) in the wholesale markets at lower rates to combat rising prices.
However, due to an increase in demand during the festive season and diminishing stocks, onion prices have continued to rise. Shirke pointed out that the influx of stored onions has diminished by around 40 percent over the past two weeks, dropping from approximately 400 vehicles with a 10-tonne capacity to just 250 vehicles.
Experts quoted in the ET report anticipate that onion prices will remain elevated or experience further increases for at least two months before the situation stabilizes. They also highlighted that the sowing of kharif onions in the southern states of Karnataka and Andhra Pradesh has been low due to farmers incurring losses in the past two years. Additionally, below-average rainfall in these states has negatively impacted onion production.
The surge in onion prices may contribute to inflationary pressure over the next couple of months, alongside the elevated costs of pulses and cereals. This price hike could also place an additional burden on millions of households that consume onions as a daily staple.
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