Explained | Here’s why onion prices are on the rise across India

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Agriculture Minister Narendra Singh Tomar reassured that onion prices will come down in the next few days

The price of a most fundamental ingredient in the bulk of food recipes is sky rocketing and it has Indians worried.

Onion has once again made headlines with retail prices shooting to as high as Rs 80 per kilo in Mumbai and Delhi. The situation is not better in other metro cities with Chennai and Bengaluru selling it for Rs 60 a kilo and Hyderabad being the most affordable at Rs 41-46 per kg as of today.

Last week, the average trading price in Lasalgaon’s wholesale market increased by more than Rs 1,000 per quintal. The current wholesale rate of Rs 4,000 per quintal is the highest onion has seen in the last four years, The Indian Express has reported.

According to data of the Price Monitoring Cell (PMC) of the Consumer Affairs department, the retail price of onion has increased by Rs 20-25 per kilo across the country in the last six months.

While the price rise has translated to an added burden on the common man’s pocket, it has also disturbed the government, which has taken up a host of measures to curtail the price, including the controversial tender to import onions from Pakistan.

With Maharashtra and Haryana Assembly elections only a month away, the government will have to walk a tight rope of not upsetting onion farmers, who form a part of their rural voter base, and pacifying the urban consumers who are shelling out more money for the bulb.

Why is the price of onion on the rise?

The spike in the price of onion comes ahead of Navratri and after the holy month of Shravan, when the consumption of the bulb goes down. Lakhs of people in Maharashtra do no consume onions (and non-vegetarian food) in their food during these periods.

The current rise in onion prices is a result of last year’s drought and a delayed monsoon this year. The situation is compounded by excessive rainfall in onion-growing areas, which has delayed the harvest period by a week or so.

About 90 percent of India’s onion comes from the states of Karnataka, Maharashtra, Madhya Pradesh, Gujarat, Rajasthan, Uttar Pradesh, Bihar and West Bengal. Of this, Maharashra contributes to nearly one-third of the country’s production of the vegetable.

Nashik, Pune, Ahmednagar, and Aurangabad form the onion-growing belt of Maharashtra.

Is there no buffer stock?

To ensure uninterrupted supply of onion throughout the year, the crop is grown in three cycles –  Kharif (which is sown in May-July and harvested in October-December); late kharif (which is sown in August-September and harvested in January-March); and Rabi (which is sown in October-November and harvested in April).

Of these, kharif and late kharif crops cannot be stored because of large moisture content. Which means, onion grown in the rabi crop cycle is the only one that can be stored.

Farmers usually store their onion produce in moisture-proof and dust-proof structures, called kanda chawl, so as to prevent them from sprouting. They release their produce steadily depending on the price of onion in the market, which enables continuous supply.

This year, the cultivation of onion in the rabi crop cycle decreased in Maharashtra – from 3.54 lakh hectares in 2017-18 to 2.66 lakh hectares in 2018-19.

To add to the woes, Karnataka received heavy rainfall during the harvest period of the onion grown in kharif season. In addition, the arrival of kharif onions from Karnataka has been delayed after the state was lashed with heavy rains a couple of weeks ago.

While markets saw the arrival of 35,000 quintals per day in September last year, the amount has dropped to 25,000 quintals this year.

The new batch of kharif onion crop grown in Maharashtra would not hit the market before the end of October this year. Until then, the stored rabi crop will be supplied to the market.

Currently, the Centre has a buffer stock of 56,000 tonnes of onion, of which 16,000 tonnes has been offloaded so far. In Delhi, 200 tonnes a day is being offloaded, news agency PTI reported.

What is the government doing to mitigate the problem?

On September 6, state-owned MMTC (Metals and Minerals Trading Corporation of India) had floated tenders for importing 2,000 tonnes of onions from ‘Pakistan, Egypt, China, Afghanistan and other countries of origin’.

After farmers protested against importing onions from the neighbouring nation, Pakistan was dropped from the list.

The Centre is also attempting to restrict exports by sharply hiking the Minimum Export Price (MEP) to 850 dollars per tonne.

Besides, Agriculture Minister Narendra Singh Tomar reassured that onion prices will calm down in the next few days. He said, “Onion situation will improve in the next few days. Cooperative Nafed is releasing stock from the central buffer at a lower price. We have enough stock of onions.”

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