Monday, May 20, 2019


Decline in onion prices in Maharashtra impacting prices of new stocks
Wednesday, 28 November, 2018, 08 : 00 AM [IST]
Shraddha Joshi, Mumbai
With pressure to exhaust stock from last season, the prices of onions in Maharashtra have hit a low – ranging from Rs 200 to 300 per quintal. This is impacting the prices of new stocks, which have already started piling.

A varied number of factors, including the huge carry forward of the last rabi season’s (March-April) stock, slowdown in consumption in the southern states of Tamil Nadu and Kerala due to the cyclone and poor demand from the exporters, have led to the decrease in the prices of the crop.

At Lasalgaon’s Agriculture Produce Market Committee (APMC), India’s largest wholesale onion market, the prices dropped below Rs 300.

Further, the stored onions of the rabi (summer) season are of an inferior quality. That is hurting price sentiments as well as impacting the price of the new crop of the kharif (winter) season.

Getting into the details Jaydatta Holkar, chairman, Lasalgaon APMC, said, “The stocks from the previous rabi season are still stored with farmers and traders. That is creating supply pressure in the market. They want to dispose of the old stock, as the arrival of the new crop is due to start from other northern and central states in December, leading to a further decline in the prices.”

“Due to the rain deficit in many parts of the country, farmers forecast getting a better price for their summer crop. However, their expectations went wrong, with the prices falling further due to the poor quality and new arrivals,” he added.

“Farmers are bringing the old stock, which is fetching them about Rs 300 per quintal.  With the new arrivals and a huge stock of the old crop, the prices of the new crop are also getting impacted. The new crop is fetching between Rs 600 and Rs 700 per quintal in the markets, compared to Rs 1,500-2,000 per quintal. Thus, the weak price sentiment is influencing the new crop prices too,” said Holkar.

The traders and the farmers admitted that the sharp decline in the market price resulted in loss only to farmers, as they were the final stakeholders.

The cost of production of growing onions is between Rs 800 and Rs 900 per quintal. Farmers prefer to stock the summer onion, as it has a shelf life of 8-9 months. But the reduction in the wholesale price of summer onions has resulted in a huge loss to farmers this year.

Exporters are also avoiding purchasing the old stock due to its inferior quality. Holkar said, “We are hoping that the export situation will improve once the fresh crop is available in the market.”

It is important to note here that recently, the Government of India has approved Operation Greens, the Central sector scheme aimed at the integrated development of value chain for three commodities (tomato, onion and potato [TOP]) and ensuring that the prices of the three commodities are stable.

A budget of Rs 500 crore has been approved for the same for the fiscal years 2018-19 and 2019-20.

In this regard, the Ministry of Food Processing Industries (MoFPI), Government of India, has also laid down operational guidelines.

Commenting on this, Holkar said, “The benefit of Operation Greens will not be possible, as it does not include onions from Maharashtra.”
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