Respite likely on onion prices next week

Onion prices are likely to begin falling in a week, with an expected increase in supply on intensified harvesting, halted for two weeks due to extended rain.

Despite intermittent declines in the wholesale markets, consumers have continued to pay highly for onions over an unusually sustained period of a little over two months.

Data compiled by the Ministry of Consumer Affairs show a huge difference between wholesale and retail prices.

At the wholesale market at Vashi, Navi Mumbai, prices were Rs 48-52 a kg two months earlier and had fallen to Rs 36 a kg earlier this month; retail consumers continued to pay Rs 65–70 a kg throughout.

In Delhi, the price was Rs 48.75 a kg in the wholesale market on Tuesday and Rs 69 a kg in retailing.

“The price difference between the wholesale and retail markets should be Rs 5-7 a kg; Rs 10 a kg at the most.

"Such a massive difference and for such a sustained period is unusual,” said R P Gupta, director, National Horticultural Research and Development Foundation.

He said prices had moved up again after a decline due to disruption in

harvesting of the kharif crop. Extended rainfall left too much mud in the field.

After hitting a high of Rs 52 a kg a week earlier at the benchmark Lasalgaon mandi, the largest in Asia, the price fell to Rs 42.50 a kg on Tuesday.

A week ago, a similar trend was seen.

However, consumers in this city continued to pay Rs 60 a kg, according to official data.

So, too, in Kolkata, where the wholesale price, said NHRDF, fell by Rs 4 to Rs 48.75 a kg a week earlier but recovered to hit Rs 52 on Monday, before again falling to quote at Rs 43.75 a kg on Tuesday.

Yet, retail prices continued to remain at Rs 65 a kg on Tuesday.

“The implication of the price fall in the wholesale market comes with a week of lag to retail market, as the quantity in transit gets exhausted in this period.

"In this case, consumers will see the price decline after a week,” said Gupta.

“Retail market prices remained higher due to hoarding by a handful of large traders that book entire quantities directly from farmers and get delivery at their own convenience,” alleged Virendra Singh, chairman of the National Consumer Cooperative Federation.

He said what was needed was improvement in the distribution network.