Weak monsoon and hoarding responsible for onion price rise in the city.
There has been a sharp rise in the prices of onion in the city as wholesale rate of the commodity have shot up 70 per cent in Lasalgaon, India’s largest wholesale onion market. The average price has leaped 54 percent in two weeks to 2,550 rupees per 100 kg, its highest since November 2013 and retail prices of onion have increased in the range of Rs 35-40 per kg in the city. Thus rising onion prices will bring tears into the eyes of Mumbaikars. Onion is a useful ingredient which is used in the preparation of various dishes. Price rise of onion will definitely become a political issue as it had played a vital role in bringing down the Delhi and Rajasthan government in 1998 and the central government in 1980. Opposition always try to derive mileage out of this issue and up the ante against the government.
After China, India is the second largest producer of onion and enjoys 19% share of the global onion production. Maharashtra and Karnataka are the chief onion producing states in India and contribute near about 45% of the total production of onion in India. Maharashtra alone contributes around 30 per cent of the nation’s total onion production.
“Any rise from this level will exert pressure on the consumer price index inflation. The onion, being an essential item, evokes sharp reactions from the households and even the political parties. Thus, there is a need for being watchful,” Assocham’s Secretary General D S Rawat said.
The prices in both wholesale and retail markets have been rising in recent weeks due to sluggish supply of good quality onion in the wake of the crop getting damaged in storage across major growing states, including Maharashtra.
“Prices could jump further as a mismatch between demand and supply is expected to worsen due to weak monsoon rains”, said Changdev Holkar, former director of the National Agricultural Cooperative Marketing Federation.
The government has held the hoarders responsible for the onion price rise. Expecting further increase in onion prices, the government has already increased MEP of the commodity to USD 425 per tonne and extended by another year the ban on hoarding of the key kitchen staple beyond a prescribed limit.
“The major reason for the shortage is the damage of rabi crop last season due to unseasonal rains in March-April. Also, replanting of kharif crop is likely to get delayed due to deficiency of rains in July,” said Atul Shah, director, Agricultural Produce Marketing Committee, Pimpalgaon.
“If onion prices continue to rise then it will definitely affect my household budget. We may even discontinue buying onions for some time until the prices become stable” said Rita Singh a Kandivali resident.
“Last year there was no rise in onion prices as the Maharashtra assembly elections were just round the corner. The government had intervened at the right time to prevent the price hike. But this time around they are least bothered about the onion price rise as no election is happening in the state” said Arvind Sethi, a Borivali resident.
The Centre is also planning to import onion, though in limited quantity, to boost the domestic availability. Much of the Rabi (winter) onion crop is stored to meet the demand in lean period. But in 2015, most of the onion kept in storage is of poor quality as the Rabi crop got damaged due to unseasonal rains in early March.
The country’s onion production is estimated to have declined to 189.23 lakh tonnes in the 2014-15 crop year (July-June), as against 194 lakh tonnes in the previous year, as per government data.
The country’s onion exports declined to 10.86 lakh tonnes in the 2014-15 fiscal due to high MEP (minimum export price), as against 13.58 lakh tonnes in the previous year.
Assocham has suggested timely and realistic assessment of crop and a reliable estimate of consumption requirement state-wise with proper understanding of peak demand period/month and volumes is a pre-requisite for prudent handling of the developing situation in onions.