Why Onion Prices Have Climbed 300 Per Cent

Traders claim the quantity of onions received from other parts of the country has also been poor.

Nashik: At Lasalgaon in North Maharashtra, Asia's largest onion market, prices are a whopping Rs 60 per kg. The same quantity last year was selling for Rs 15, indicating a 300 per cent increase.

Experts, farmers and traders claim the dramatic increase is a result of hailstorms in the months of February and March that damaged 30 per cent of the summer crop.

"The crop was ready for harvest in April. As a result of unseasonal rains and hailstorms, the expected crop was reduced from 60 lakh tonnes to about 30 to 35 lakh tonnes," Changdevrao Holkar, Ex-Director of the National Agricultural Cooperative Marketing Federation told NDTV.

A look at the data, however, suggests that crop damage alone cannot explain the massive jump in onion prices.

Despite the damage, compared to last year, the drop in monthly onion arrivals at Lasalgaon from April to July was only 13.55 per cent. But in August, arrivals dropped nearly 70 per cent, pushing prices up by 300 per cent - an indication that as the harvest season comes to an end, farmers perhaps are holding stock back.

This could be because poor rains have raised fears that the next onion crop, harvested in September will also be hit, creating a future shortage.

Nationally, too, a closer look at the figures suggests a shortfall far less than is reflected in prices.

This year's onion harvest, of 189 lakh tonnes, is only down by 2.6 per cent compared to last year's 194 lakh tonnes but experts say the amount of onions stored by farmers is not very much.

Traders claim the quantity of onions received from other parts of the country has also been poor.

"The belt from Hubli to Bangalore and Tadepalle to Vijayanagram is of the new onion crop. By now, about 1,500 to 2,000 trucks should have arrived, but it's stuck at 300 to 500 trucks", said Manoj Kumar Jain, a trader.