Onion Prices Stay High At Rs 45 Per Kg Amid Ongoing Supply Shortages

This hike is linked to the conclusion of the Savan month, during which many Hindus in North India avoid onions and adhere to other dietary restrictions, leading to a spike in demand as the period ends

The cost of necessities in a vegetarian kitchen continues to increase, with onions seeing the most notable price jump. Currently, onions are priced at an average of Rs 45.69 per kilogram, up from Rs 31.40 per kilogram at the same time last year, according to the Price Monitoring Cell of the Department of Consumer Affairs.

According to a report by The Economic Times, onion prices have surged past Rs 50 per kilogram in many metropolises, marking a 25 per cent increase since July. This hike is linked to the conclusion of the Savan month, during which many Hindus in North India avoid onions and adhere to other dietary restrictions, leading to a spike in demand as the period ends.

At Lasalgaon, Maharashtra, India's largest onion trading hub, the average price of onions has surged by about 30 per cent over the past month, reaching Rs 35 per kilogram as of Wednesday. Onion traders are holding onto their stocks, anticipating further price hikes due to the possibility of heavy rainfall in October and November, which could disrupt supply, adding a layer of uncertainty to the market.

Earlier this month, Maharashtra Deputy Chief Minister Ajit Pawar regretted the central government's decision to ban onion exports late last year, labelling it a mistake. The export ban, aimed at controlling rising prices, led to protests from farmers in Maharashtra, a major onion-producing region. Although the ban was extended in March, it was lifted in early May, just before the elections in Maharashtra's onion-producing areas.

Retail onion prices in India remain high due to a combination of lower-than-expected production and market factors, according to a report by The Indian Express. A major contributing factor is the reduced rabi acreage from the previous year. The rabi onion crop, planted in December-January and harvested after March, usually makes up 72-75 per cent of the country’s total onion consumption. However, this year, the area dedicated to rabi onion cultivation has dropped significantly, with only 756,000 hectares sown compared to 1.23 million hectares in 2023.