Onion prices, already on a sharp upward spiral, are expected to rise further following a substantial decline in crop arrivals in the Agricultural Produce Marketing Committee (APMC) in Nashik.
The average wholesale prices in the country's largest wholesale onion market, Lasalgaon APMC, around 220 km from Mumbai, hovered at a record high of Rs 4,800 per quintal in the first week of this month.
This pushed the prices to between Rs 55-65 in the retail markets, sending domestic budgets haywire in the festival season, which started with the ongoing 10-day Ganeshotsav.
The unprecedented price rise is attributed to a sudden decline in regular supplies from an average of 12,000-15,000 quintals a day to around just 8,000 quintals, in August.
Owing to scarce supplies, wholesale prices shot up from Rs 3,000 a quintal to Rs 4,300-Rs 4,500 a quintal in just a couple of days, with a cascading effect in the retail markets.
In fact, August 13, when the price had touched Rs 4,500 per quintal, the government had considered various options, including banning exports and importing cheap varieties to balance the high prices in local markets.
A consignment of relatively cheaper Egyptian onions arrived here a couple of days ago and was lapped up at an average of Rs 48-52 per kilo by the consumers.
However, only in the past few days, there has been a sharp fluctuation in the prices. Thursday last, it was Rs 4,500-Rs 4651 per quintal, and the next day, Friday, it climbed to Rs 4725-Rs 4,800 per quintal.
The high-grade onion prices hovered around Rs 5,016 per quintal and Lasalgaon APMC said that around 6,500 quintals of onion were picked up during the weekend to cater to the festive season.
There are serious apprehensions in official and market circles about the high fluctuations in the prices with at least one month before fresh kharif crops reach the markets.
In the ongoing Ganeshotsav, followed by Navratri and Durga Puja with Diwali following close afterwards, the demand for the most essential kitchen item is expected to soar, further fuelling a price rise.
Fresh stocks from the kharif harvest are expected to ease prices and calm the markets.