Nearly half the country’s states paying over Rs 50 per kg for onions: MC Analysis

The prices have risen 46 percent compared to the previous year and were trending 28.6 percent higher since the start of the year, enough to warrant a response from the government.

On September 5, the government announced the start of discounted onion sales at Rs 35 per kg in the National Capital Region and Mumbai.

Onions were an important factor in elections in Delhi and Rajasthan in 1998.

Higher prices are more of a concern for incumbent governments in states headed for elections. While people in Haryana pay less for onions at Rs 45.6 than the national average of Rs 48.8, prices have risen much faster over the year at 67.9 percent compared with the national average.

Prices in Maharashtra were 60.5 percent higher from September 2023. In September, the average price for onions in the state was Rs 49.31. J&K, which is also headed for election in October, was paying Rs 56.12 per kg.

However, analysis shows that it is not just the onions that are becoming a tearjerker.

In August, price of potatoes at Rs 37.21 per kg was the highest in 44 months. Although the average price for the first five days of September at Rs 36.7 has declined since, it is still 61.7 percent higher since the start of the year and 50 percent up from a similar period last year.

Although tomato prices eased to Rs 44.13 per kg compared with a peak of Rs 65.65 witnessed in July, they were still trading 36 percent higher since January and 39.6 percent higher from the previous year for the first five days of September.

The three vegetables are likely to push inflation higher if the trend holds for the rest of the month.

Tomatoes, onions and potatoes account for 2.2 percent of the inflation basket.

Economists have been pointing to a rise in vegetable inflation since August.

“Vegetable inflation is projected to remain high, bouncing back to double digits, and the deflation in edible oil is expected to reduce further,” said Rajani Sinha, chief economist at CareEdge.

While a Crisil report noted that the price of homecooked vegetarian and non-vegetarian meals declined in August, it said that the rise in potato and onions had arrested the decline in thali costs.