Wholesale onion prices drop 36% on arrivals

Onion prices in India fell 36% on Monday after supplies from the new arrivals season rose amid weak demand, prompting farmers to boycott auction at a few markets, government officials and dealers said.

Average onion prices at Lasalgaon, the country's largest wholesale market in Maharashtra, were at 1,400 rupees (USD 30.6) per 100 kg. "There was a sharp rise in arrivals from late summer-sown crop. Arrival pressure will remain there in the market for next two weeks," said a senior official with Lasalgaon Agriculture Producing Marketing Committee. "After a sharp fall in the morning session, farmers boycotted auction in the afternoon," the official said. Apart from Lasalgaon, Manmad--the other key market in the state--also witnessed boycotts. Maharashtra is the biggest onion producer in the country. In December, a multi-fold rise in prices of onion--a key ingredient of food in the country --had pushed up food inflation to one-year peak, triggering criticism against a government that is already battling corruption scandals. Onion supply in the country had nosedived after unseasonal rains during October-November damaged standing crop in the top producing states such as Maharashtra, Andhra Pradesh, Karnataka and Gujarat.