Onion Becomes Costlier As Farmers Hold Stocks In Hopes Of Better Prices: Report

The report found that the average wholesale price of onions stood at Rs 26 per kg in the Lasalgaon mandi in Nashik on Monday, against Rs 17 per kg logged on May 25

Farmers are hopeful that the government will remove the export duty, leading to an increase in prices in the market

Source : PTI

With the summer season in full swing and the festival of Bakra Eid around the corner, onion prices in the country have reportedly been increasing in the last two weeks. A slowdown in supply and surging demand has resulted in a jump in the prices of the commodity in the last fortnight, media reports said.

According to a report by The Economic Times, onion prices in the domestic market have jumped by 30 per cent to 50 per cent in the last two weeks. The demand has been on the rise ahead of the Eid-al-Adha festival, and as such, traders have started holding stocks in anticipation of a relaxation in the government interventions to manage prices.

The report found that the average wholesale price of the produce stood at Rs 26 per kg in the Lasalgaon mandi in Nashik on Monday. Comparatively, onion prices in the region touched Rs 17 per kg on May 25. 

Meanwhile, prices of best quality onions, which account for a small share in the overall trade volume, surged to touch Rs 30 per kg at several wholesale markets in the state. 

An imbalance between supply and demand has led to this increase in prices. Notably, the onions supplied in the markets from June onwards come from the inventories of farmers and traders. Currently, farmers are holding back on their stock in hopes of an increase in prices in the market, after the rabi crop of 2023-24 declined.

While exports remain weak owing to a 40 per cent duty on exports imposed by the authorities, the traders stated that demand for onions remain strong for the upcoming Eid festival on June 17. The report cited an onion trader, Vikas Singh, Nashik, Maharashtra, and said, “There is strong demand for Maharashtra's onions, especially from the southern states.”

Ajit Shah, President, Horticulture Produce Exporters’ Association, explained that farmers are currently hopeful that the government will remove the export duty. This will lead to an increase in prices in the market and based on this assumption, they are holding their onion stock to sell later at better prices.