Business Desk – Onion Price Surge: There has been a sharp rise in onion prices in the country between June and September. According to government data, the average retail price of onion on June 1 was Rs 29.50 per kg. By September 17, it increased to Rs 53.78 per kg. That means, onion became costlier by 82.3% in about three and a half months.
The rise in the wholesale market was even greater. The average wholesale price of onion on June 1 was Rs 22.60 per kg. On September 10, it increased to Rs 46.20. On September 17, the wholesale price was recorded at Rs 45.68 per kg. That means the price of onion in the wholesale market almost doubled as compared to June.
Crop failure in Maharashtra, arrivals reduced
The main reasons behind the rise in onion prices are the failure of summer crop in Maharashtra and less arrival in the mandis. Apart from this, the market has also been affected by the decrease in supply from Karnataka.
The availability of onion in the market has also reduced due to delay in the arrival of the new Kharif crop. This is the reason why there is pressure on prices in both retail and wholesale markets. However, with the increase in arrival of the new crop, onion prices are expected to come down soon.
How does the government control onion prices?
When there is a sharp increase in prices, the government intervenes at many levels. The most important among these is buffer stock. The government stores onion purchased at low prices and sells it at cheaper rates when prices rise in the market. On many occasions, onion from buffer stock has been launched in the market at a rate of Rs 35 per kg. This increases the availability of onion in the open market and provides some relief to the common people.
Ban on export if necessary
When the shortage of onion increases in the country, the government also takes steps like tax or ban on export. Its objective is to keep sufficient onion available in the domestic market and control prices.
However, despite getting some relief from government onion, consumers are not able to get complete relief due to high prices in the retail market and frequent changes in policies.
Why do onion prices increase in August-September?
Onion prices often rise during August-September. There are many reasons behind this.
Festive Season: Onion consumption increases during Rakshabandhan, Ganesh Utsav and upcoming festivals. Due to this, increase in demand affects the prices.
Rains and Logistics: The supply chain gets affected during rains. Due to delay in onion reaching the markets, availability in the market may decrease.
Crop cycle: The stock of the old crop starts getting exhausted, while the arrival of the new Kharif crop takes time. Meanwhile, a decrease in supply pushes prices up.
When can onion become cheaper?
At present, there is pressure on prices, but the supply is expected to improve after the arrival of new Kharif crop increases. This may reduce onion prices in both wholesale and retail markets.
