There has been 10%-15% lower production in the early kharif crop due to erratic rainfall. However, experts believe there is no need to panic as this is only a fifth of the annual production and there is plenty of stock
Early kharif crop production from the country's largest onion producing region of Nashik has declined by 10%-15% from that last year, due to erratic and scanty rainfall. But experts believe that this should not impact wholesale prices much, although speculation of possible supply shortage could see retail prices rise.
The early kharif crop contributes about a fifth of the annual onion production. Onion prices in the Mumbai wholesale market currently are in the range of Rs10-15/kg and in the retail market between Rs17 and Rs20 a kg.
Dr RP Gupta, director, National Horticultural Research and Development Foundation (NHRDF), told Moneylife, "This year the early kharif onion production from the Nashik region dropped by 10%-15% due to of erratic and scanty rainfall. But there is not need to panic, for there won't be any supply shortage as there is a stock of around 29lakh metric tonnes. Out of this only 30%-35% has reached the market."
NHRDF monitors onion prices and market arrivals on a daily basis.
Commenting on the prices, Mr Gupta explained, "The wholesale prices are stable, its only retailers who are charging high prices on anticipation of supply shortage."
But traders feel prices at the wholesale market may also shoot up by the end of next month. Ashok Walunj, director at the onion and potato market at APMC, Vashi, says, "Prices in the wholesale market might go up to Rs20-Rs22 from the current Rs10-Rs15, after the Ganesh festival, if there is shortage. Currently, there is no new crop available in the market."
"At present, the wholesale prices are stable. It's the retailers who charge extra for their margins. If heavy rains continue, it could impact the crop and prices (wholesale) might increase. But it will only surge from October," says a trader from the Vashi market.
Panvel-based trader S Altamash, of Gemini Trading, disagrees, saying that prices will not increase. "Farmers from Nashik are unwilling to bring their produce in the market in anticipation of good returns. But with the arrival of rains they had to sell their produce on the fear of crop damage. So there is adequate storage and supply of onions," he says.
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