Onion prices are on the rise once again, leading to concerns about increasing household expenses and potential inflation. Government data as of October 25 suggests that the maximum retail price of onions has surged to around Rs 70 per kilogram, and this upward trend is expected to continue until December when the kharif crop becomes available in the market.
Data from the Department of Consumer Affairs reveals that the average wholesale price of onions as of October 26 has reached Rs 3,112.6 per quintal, a significant increase from Rs 2,506.62 per quintal on October 1.
More specifically, the average wholesale price at the Lasalgaon Wholesale APMC in Maharashtra has spiked by nearly 60 percent in the past two weeks, reported The Economic Times.
This surge in wholesale prices has had a substantial impact on retail onion prices nationwide, with rates exceeding Rs 50 per kilogram in many regions.
In the National Capital Region (NCR), onions are now being sold at Rs 50-60 per kilogram in various markets, including online grocery stores, marking a substantial hike from prices observed just two weeks ago.
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Nandkumar Shirke, Chairman of the Association of Onion Traders of Ahmednagar District, told ET that the average onion price in the Ahmednagar market has risen from Rs 35 per kilogram around ten days ago to Rs 45 per kilogram at present.
The price rise comes even as the central government imposed a 40 per cent export duty on onion exports in August to deal with rising demand and delayed production.
It had also started selling onions procured by the National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) in the wholesale markets at lower rates to tackle rising prices.
However, due to a surge in demand during the festive season and dwindling stocks, onion prices have escalated.
Shirke mentioned that the influx of stored onions has diminished by around 40 per cent over the past two weeks, dropping from approximately 400 vehicles with a 10-tonne capacity to just 250 vehicles.
Experts quoted in the ET report anticipate that onion prices will remain elevated or experience further increases for at least two months before the situation stabilises.
They also pointed out that the sowing of kharif onions in the southern states of Karnataka and Andhra Pradesh has been low due to farmers incurring losses in the past two years.
Additionally, below-average rainfall in these states has negatively impacted onion production.
The surge in onion prices may contribute to inflationary pressure over the next couple of months, alongside the elevated costs of pulses and cereals. This price hike could also place an additional burden on millions of households that consume onions as a daily staple.
