Flooding in major onion producing states leads to spike in prices
Unseasonal rains in 3 major producing states have seen the crop marooned in fields & prices jumping each day.
It rained nearly one and a half times more than normal in Maharashtra between October 1 to November 6, when rains doubled from the year ago in Karnataka and Telangana received 65% more than usual. This unseasonal deluge damaged crops on one third of Maharashtra’s cultivated area.
Farmers from the states affected by unseasonal rainfall are not able to harvest their crop from fields submerged under rainwater, boosting average average wholesale prices by 120% within a fortnight at Lasalgaon market in Nashik district; from Rs 25/kg on October 19 to Rs 55/kg on November 4.
Even in capital Delhi, retail prices crossed Rs 80/kg level. Lasalgaon sets the benchmark of onion trade in the country.
Though prices are high, presently, there is no shortage of onions in Delhi, with daily arrivals crossing 1000 tonnes, much higher than the city’s daily consumption, as fresh harvest of onions from Rajasthan is feeding NCR. Yet, prices will remain expensive in November and soften slightly in December before diving in January, when it will be farmers who would be severely affected.
Excess rainfall in Maharashtra, the top onion producing state of the country, in August, September, October and even November, destroyed the crops.
“I had harvested my onion just before Diwali and left it in the fields for drying. I cannot take it to market even today as we have been continuously getting rainfall not allowing the crop to dry,” said Vikas Bhosale, a farmer from Indapur taluka of Pune district.
“The area under kharif onion was less by about 7% due to impact of drought and delayed onset of monsoon. However, its impact is over now. The current rise in onion prices is primarily due to excess rainfall taking place earlier in Karnataka and now in Maharashtra. Farmers have harvest-ready crop they are not able to harvest due to wet fields. They are unable to dry the produce and take to the markets,” said a top official of the central government, who cannot be identified because he is not authorised to speak to the media.
Unfortunately, Consumer Affairs minister Ram Vilas Paswan said on Thursday that the onion prices rose as kharif crop fell short by 30% to 40% this year. However, traders and some top government officials strongly countered the minister’s statement. They said there is enough available in the country but the harvesting has been delayed.
“Such kind of statements coming from the minister will surely lead to rise in prices,” said a trader from Azadpur market.
It was the higher quantity of onion storages at about 52-53 lakh tonne against 50 lakh tonnes in the previous year that helped augment supplies as rains damaged fresh crop.
At Lasalgaon in Nashik, where rainfall has been heavy, arrival of old crop that farmers stored over the past five to six months, is more than the new crop. On Thursday, Lasalgaon received 160 trucks of old crop and six of the new crop with average rates ruling at Rs 40/kg.
The sowing of the late kharif crop has also been delayed due to rains.
“I have lost more than Rs 15,000 on onions seeds so far. I sowed about 12 kg seeds in two phase and both times, the saplings rotted due to continuous rainfall. I have once again sowed some seeds of the rabi crop. It is cloudy even today. I hope that it does not rain anymore,” said Sanjay Desale from Malegaon taluka of Nashik district.
At the neighbouring Ahmednagar district, where rains have receded a bit, arrival of the new crop is on the rise. But its quality is inferior. As soon as farmers get respite of a few days from the rainfall, they are getting the kharif crop to the markets. However, the rain damaged crop can travel only upto 100 km to 200 km restricting its sales within Maharashtra.
“About, 80% of the current arrival at Ahmednagar market is of new onion. However, we cannot send it outside the state due to inferior quality,” said Nandu Shirke, chairman, Ahmednagar Onion Traders’ Association.
Presently, the highest price is fetched by the stored onion of previous year’s rabi crop. Rabi onion has longer shelf life than the kharif onion and hence commands premium price.
When it comes to wholesale and retail prices, the official mentioned above said that at least in Delhi, the problem is not of availability. “We have more onion available than what is consumed by the city in a day as most of the ongoing harvest from Rajasthan is coming to Delhi.”
Rejinder Sharma, general secretary, Onion Traders Association of Azadapur APMC confirmed that there is abundant onion available in the market. “The wholesale rates are also coming down every day by about Rs 5/kg to Rs 10/kg due to growing arrivals from Rajasthan.”
How long the onion prices remain firm will depend upon when the rainfall stops and the extent of losses emerge. Consumers will have to pay high price for better quality onions. “There will be wide range of onion price as the rain damaged new crop will be available cheaper, while the best quality will fetch premium price,” said Danish Shah, an onion exporter from Maharashtra.
The politically sensitive nature of onion price rise saw the central government removing the phytosanitary condition of fumigation of onions at the country of source for import of onions. However, as domestic prices move downwards, importers have lost parity. During last one month, traders imported about 100 containers of onions; 90% of which came from Egypt.
“With decline in domestic prices this week, there is no import parity now,” said Shah.
He expects that the wholesale prices of good quality onion will remain around Rs 40/kg till end of November, after which, they will begin to decline, settling at about Rs 30/kg by end of December. For cheaper onions, consumers will have to wait till the New Year, by when the scarcity will transmogrify nto problem of plenty.