India grapples with soaring onion prices, attributed to delayed crop arrivals and export duty hikes, with the core issue being a marked reduction in onion supplies.
In the national capital region, the cost of onions has experienced a surge, with an increase of 25-50 per cent. As for Maharashtra, there has been a substantial surge of almost 60 per cent in the average wholesale onion prices. The domestic onion prices are expected to continue to remain elevated due to the delayed arrival of the kharif crop, expected to reach the markets approximately two months later than usual.
According to senior trade sources, the planting of Kharif onions in the southern regions of Karnataka and Andhra Pradesh witnessed a decline due to farmers facing losses in the previous two years. On the other hand, below-average rainfall in these states has contributed to a further decrease in onion production. The forthcoming Kharif onion harvest for the country will now primarily come from Alwar in Rajasthan, as outlined in a report from The Economic Times.
During the month of August, as worries arose regarding diminished Kharif crop yields owing to excessive monsoon rainfall in certain regions of the nation, onion prices experienced an upswing. In the same month, the government implemented a 40 per cent increase in the export duty on onions as a measure to secure their accessibility within the domestic market. However, the prices still remained high further impacting the CPI (Consumer Price Index). The increased export duty on onions had also led to protests by traders who worried it might disrupt exports and lead to stockpile-ups at ports.
For now, the definitive cause behind the surge in onion prices remains the notable reduction in onion arrivals to the market.