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After brief respite, here’s why onion prices are expected to go up again: Report

From the onset of the onion crisis, Turkey and Egypt have been two of the key onion import destinations for India.

December 24, 2019 / 10:32 PM IST

With Turkey halting export of onions for a while, prices of the bulb may rise by another 10 percent to 15 percent after a brief respite, as per a report by The Indian Express.

From the onset of the onion crisis, Turkey and Egypt have been two of the key onion import destinations for India. Traders have been relying heavily on the two countries, along with China, in order to procure the pricey vegetable. With Turkey putting a hold on the export of the bulb, wholesalers in India are expected to feel the pinch. This, however, would eventually ease out once domestic arrival of onions improve.

According to the report, provisional data up to revealed that India imported 7,070 tonnes of onion in this fiscal year. Of this, 50 percent came from Turkey, according to traders. However, the price of onions in Turkey soared as a result of the rise in export of the bulb from the country.

Suresh Deshmukh, an agent operating in a wholesale market in Maharashtra’s Nashik, confirmed that Turkey had to halt onion export as the prices there, too, had shot up. He added that they took the same step as India to check domestic onion prices. He was referring to the Indian government's decision in September to ban the export of the bulb in order to regulate the prices here.

This ban, the traders believe, would further increase onion prices in India soon. However, some traders do not concur. For instance, Pune-based wholesale market trader Kunal Korpe is of the opinion that the per kilo rate of onion has stabilised at around Rs 50-60 per kg. “This correction is mainly because of the higher demand for the local produce, whose arrivals have improved.”

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In fact, he is predicting a further drop in the price of imported onions, with the arrival of about 4,500 tonnes of the bulb on December 26.

The report adds that onions continue to trade at around Rs 5,000 per quintal in wholesale markets in Nashik, while the retail price hovers at around Rs 100 per kg. A positive Rabi harvest also hints at a bumper crop after March next year.

According to the data from the Ministry of Agriculture cited by IE, the area of land under onion cultivation has increased from 2.31 lakh hectares last season to 2.78 lakh hectares by November-end. This is primarily due to onions fetching a good rate in the markets, attracting more and more farmers to ditch other rabi crop for onions.
Moneycontrol News
first published: Dec 24, 2019 10:32 pm

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