Onion prices are likely to stay firm till Diwali, traders said, as the vegetable’s rates hovered around $0,80/kg in the metros, including Delhi and Mumbai, pushed up by speculation that the damage caused to crops by untimely rains may affect supplies.
Along with onions, prices of tomatoes and vegetables like cabbage and bottle gourd have also increased, as excess moisture has damaged the quality of the crops.
Traders said the weather would remain the key factor that will influence onion prices till December, when the arrival of the new crop is typically at its peak.
“There is a high level of uncertainty. If the weather continues to play spoilsport, then the prices can increase further. However, if we get favourable weather, then prices may remain stable at current levels till Diwali,” said HS Bhalla, an onion trader from the Azadpur APMC (agriculture produce marketing committee) in Delhi.
Wholesale onion prices have more than doubled in the last month at the benchmark Lasalgaon market in Nashik district, which is currently the biggest supplier of onions to Delhi.
The average wholesale price at the Lasalgaon market has increased from $0.20/kg on September 16 to $ 0.45/kg on October 16, up by 120%.
At the Bengaluru APMC, onion prices jumped from $ 0.13/kg on September 8 to $ 0.47/kg on October 13.
At the Hubli market in north Karnataka, where the Kharif onion crop is being harvested, average prices have increased from $ 0,11/kg on September 16 to $ 0.19/kg on October 16.
The consumer affairs ministry has targeted the release of onions from the buffer stock in states where the prices are ruling above all-India average prices. Of the 208,000 tonnes of the buffer stock created for 2021-22, 67,357 tonnes have been released till October 12, the ministry said in a press release.
“Onion prices have cooled down by $ 0,04-0,053/kg during the past couple of days. If there is no further rainfall in the coming days, then the prices can remain stable at the current levels,” said Ajit Shah, president of Onion Exporters’ Association.
Traders said the demand for onions is still subdued, which has prevented a sharp rise in prices.
“Demand for onions is less. Along with Maharashtra and Karnataka, there are also concerns about the onion crop in states like Gujarat, Rajasthan, and Madhya Pradesh, which may prevent any major reduction in onion prices,” said Bhalla.
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