Six out of 16 wholesale mandis in Nashik have stopped onion trading after a sharp decline in in prices to Rs 11 per kg.
The average wholesale price of onion in Nasik, which was ruling at Rs 20/kg early this month, has now declined to Rs 11/kg, as per official data.
Wholesale rates in other onion markets in Maharashtra have also fallen. In Lasalgaon, Asian's biggest wholesale market for onion, rates were ruling at Rs 15/kg today.
"We have closed trading in six mandis since yesterday and they will open on Monday. Other 10 mandis are open. The mandis are closed due to sudden onion price fall," Deputy District Registrar of Cooperative Society Nilkanth Kare was quoted by news agency PTI. Onion prices started falling sharply since yesterday.
On a daily basis, onion arrival in mandis is about 20,000 tonnes. Onion prices had touched the peak of Rs 25/kg few weeks back and now have come down to Rs 10-11/kg, he added.
"The exact reasons are still not known. It is believed the prices fell on reports of income tax raids on onion traders and also because of rise in onion imports," Kare said.
Income tax officials raided the premises of some big onion traders in Nashik, prompting other traders in the district to slash prices. Farmers at agricultural produce wholesale markets in Lasalgaon stopped the auction as prices plummeted by almost 35 per cent following the raids.
Prices at Lasalgaon onion wholesale market reportedly went down to Rs 900 per quintal from Rs 1,400 per quintal seen on Wednesday. The lowest wholesale prices of onion recorded for the day were Rs 500 per quintal. Farmers decided to stop the auction went back with their produce instead of selling it at such low prices.
The decline in prices has caused onion farmers to worry, as the produce from the kharif season will start to roll in bulk in the coming weeks. While some portion of onion harvest has already begun to arrive at the wholesale markets, the volume is expected to pick up in days to come.
Reports stated that income tax officers conducted raids and searches at offices, godowns and residences of several big traders in Lasalgaon and Pimpalgaon areas of Nashik. These raids were in relation to the hike in onion prices seen during the course of past few months and are expected to go on for two more days. These traders reportedly account for 30-40 per cent of total onion supply in Indian markets.
Average onion prices in wholesale markets of Maharashtra had grown from Rs 450 to Rs 2,450 between May 31 and August 10, according to a report by The Times of India. The prices had skyrocketed to a 20-month high even though there was no dearth of supply. Speculations had attached this steep rise in onion prices to hoarding by traders.
Onion prices had gone up to Rs 40 - Rs 50 per kilogram in retail markets across the nation due to increase in wholesale markets. Even retail prices for onion in and around Lasalgaon went up from Rs 10 to Rs 30. The prices started to slide back to normal after a two-member committee visited Lasalgaon on August 18 to reverse the sudden upsurge in onion prices.