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Onion prices soar on drought, heavy rains; may breach Rs 100 per kg mark

A drought last year and heavy rainfall this year have sent onion prices soaring and wholesalers say that situation is unlikely to improve soon.

Kumar Vikram | August 13, 2013 | Updated 12:11 IST

A drought last year and heavy rainfall this year have sent onion prices soaring and Congress spirits plummeting. As onions retail at between Rs 70 and 80 per kg in the city, the Sheila Dikshit government can't help being struck by the irony of the bad news. It was in 1998 that the Dikshit-led Congress bested the Sushma Swaraj-led BJP in Assembly elections that pivoted on onion prices . Delhi's Assembly elections are due before this year ends.

Sixty rupees per kg was enough to make Delhi vote in anger then and the bad news of this year is only getting worse. Wholesalers say that situation is unlikely to improve soon; onions may breach the Rs 100 per kg-mark.

On Monday, onion was selling for Rs 52 per kg at the Azadpur wholesale market.

Surender Budhiraja, president of the Azadpur onion merchant traders association said that good quality onion is selling for Rs 50 or more per kg. "We don't see any fall in prices in the near future. In the next fortnight, it may go up to Rs 100 a kg in the open market if the situation does not improve," he said.


Traders say growing gap between demand and supply has led to the present crisis. Onion supplies have substantially come down in Delhi. "Usually, the daily supply in Delhi is around 130- 140 trucks. It has come down to 50-odd trucks now. On Monday, the supply in the mandi was 95 trucks, and that was only because Sunday's stock also arrived on Monday," Budhiraja said.

According to him, there has been a fall in the number of vehicles arriving in the market from Rajasthan, Maharashtra, and Madhya Pradesh over the past week. "Bad weather conditions have also obstructed movement of vehicles and it is taking a longer time to reach the city," he explained.

Delhi Chief Minister Sheila Dikshit said that the price rise of onion is mainly due to bad weather conditions. "Weather has impacted the price of onion. We are trying to get mobile vans that will sell onion at cheaper rates," she told mediapersons on Monday. When asked about fluctuation in prices, she said, "There are price fluctuations as onion is perishable." Dikshit has been keeping a close eye on onion prices.

The situation is no better at Nashik, the heart of India's wholesale onion supply.

Wholesale prices have shot up 40 per cent in the last three days to Rs 46 a kg at Lasalgaon market in Nashik, the highest in the last two- and- a- half years. According to data compiled by National Horticultural Research and Development Foundation ( NHRDF), prices at Lasalgaon, Asia's largest wholesale market for onion, spurted to Rs 45.91 a kg on Monday from Rs 33.11 on August 8. The last time prices hit this level or went beyond it was between December 2010 and January 2011.

The model rate - the price at which most of the onion is being traded - rose by 36 per cent to Rs 43 per kg at Lasalgaon from Rs 31.50 per kg on August 8, according to data compiled by NHRDF. Higher prices in Lasalgaon were reflected at Delhi's Azadpur market where rates have gone up by Rs 10 per kg to Rs 50- 55 per kg from Saturday.

Budhiraja said the new crop is expected from Tamil Nadu, Andhra Pradesh and Karnataka in September- October, and prices may see some correction. "Actual correction can be seen only after mid- October," he added.

Chairman of the Azadpur Agricultural Produce Marketing Committee Rajender Sharma said that onion prices may see some improvement in coming days. "The maximum price has already come down by Rs 2 a kg in wholesale markets on Monday and it will fall gradually. We hope that the supply will improve in coming days and price may fall further," he added.

The Delhi government has already started selling onion at reasonable rates at 350 outlets, including Mother Dairy outlets.

"They are selling at Rs 50 or a bit less, but, it is not of good quality. About 200 gram out of 1 kg is generally damaged quality," Sharma said.

Traders said the fall in production is the main reason for the price rise. "Farmers did not earn much profit last year and the crop was not so good this time. High temperature in summer also affected the crop.

And the latest trigger is heavy rain that has spoiled the crop in southern parts of the country," added Budhiraja. According to government data, India exported 6.39 lakh tonnes of onions in the April- July period of this fiscal compared to 6.94 lakh tonnes in the same period last year.

Courtesy: Mail Today 

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