Onion prices crash on higher arrivals, farmers want export ban lifted

Onion prices in India have crashed by nearly 75 percent since peaking on October 20 this year on higher supplies, leading to farmers holding back produce and demanding that a ban on exports be lifted.

“Onion prices have dropped to levels of Rs 20 a kg now that arrivals have declined over the last two days,” said Suvarna Jagtap, Chairman, Lasalgaon Agricultural Produce Marketing Committee (APMC) in Maharashtra’s Nashik district.

Arrivals at Lasalgoan APMC have dropped from about 12,000 tonnes on November 27 to 5,700 tonnes on December 5. When prices peaked on October 20, with the kitchen staple selling at Rs 100 at retail outlets in some parts of the country, arrivals at the APMC were 5,438 tonnes.

“The Unhal variety onion arrival is 4,054 tonnes now against 5,438 tonnes when prices surged,” Jagtap said, adding, “farmers are holding back their produce in view of the sharp fall in prices”.

Jagtap has written to the Union ministries of commerce and agriculture and also to shipping minister Nitin Gadkari to lift the ban imposed on exports on September 15.

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Subramani Mancombu

Journalist|Independent Journalist

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At Lasalgaon, the Unhal variety ruled at Rs 18 a kg during the weekend against Rs 71 on October 20. The superior red onion was quoting at Rs 25.50 a kg.

At Nashik APMC, one of the largest sales platforms for the bulb in the country, the Unhal was quoting at Rs 18.50 and the red variety at Rs 21 a kg.

Onion prices have declined not just due to higher arrivals but also due to measures such as a ban on exports, storage limit and imports.

“Arrivals have topped 1,000 tractors at Pimpalgaon. Quantity-wise, it could be 2,500 tonnes daily,” Nashik District Onion Traders Association chairman Sohanlal Bhandari said.

“Onion prices are hovering between Rs 15 and Rs 24 a kg, depending on the variety and quality. Arrivals have improved and are good. However, the number of tractors arriving is a little lower at between 200 and 600 against the usual 850 to 1,000,” said Nashik onion trader Jayachandra Muthalya.

Arrivals had one up, especially since the new red variety harvest had begun. "The crop seems to be good. As harvest continues, prices could be under pressure,” said Sushant Musale, another trader in Nashik.

Onion prices had softened as the quality of arrivals was good, said PK Gupta, Acting Director, National Horticultural Research and Development Foundation (NHRDF), Nashik.

According to agriculture ministry data, onion arrivals in November were 2.28 lakh tonnes in Maharashtra compared with 1.56 lakh tonnes in October. In December, around 52,000 tonnes had reached mandis, signalling a higher inflow.

In comparison, onion arrivals in 2019 were 2.07 lakh tonnes in October, 2.25 lakh tonnes in the next month tonnes and 41,00 tonnes around in early December.

Gupta said imports were continuing and according to Bhandari, contracts had been signed until the end of this month.

Muthalya said that with more arrivals on cards, prices could lower further.  “Onion consumption is expected to be low as fewer marriages are being held due to novel coronavirus pandemic and tourists flow has also ben affected,” he said.

“The only movement we saw was in southern India but rains and cyclones have affected it too,” Muthalya added.

Musale said that at the current pace of red onion harvest, the chances of a drop in prices were higher. “If the arrival of the Garwah variety onion is delayed, then prices might rule stable,” he said.

The Garwah variety was the one that was damaged during the September-October rains.

NHRDF’s Gupta said there could be a partial shortage of seeds during current Rabi sowing like last year. Seeds were in short-supply during the year's Kharif sowing as well.

Since prices are projected to be under pressure, Jagtap said the Centre should allow onion exports besides lifting the cap on storage.

“Farmers need money as 50 percent of their crop got affected in the rains. Resuming exports will help them fetch better prices for their onions,” she said.

Onion prices surged during September-October this year as the crop was hit by rains in Karnataka, Maharashtra, Gujarat, Andhra Pradesh and Madhya Pradesh. Besides, there was a shortage of seeds and the crop was hit by Anthronose and Twister bacteria

According to the agriculture ministry's third advance estimate of the country's horticultural crops, onion production during the 2019-20 season (July-June) is estimated at 26.15 million tonnes against 22.82 million tonnes in 2018-19.

(Subramani Ra Mancombu is a journalist based in Chennai, who writes on commodities and agriculture)