Onion prices rise on reports of damage to stocks

Onion prices have risen by Rs 750 / quintal in the past ten days in markets in Maharashtra’s Nashik district, the center of the commodity, but prices are likely to head south once the early onion leaves Kharif starts arriving next month.

“Traders have raised prices citing damage to warehouse stocks. But they have raised prices to entice growers to bring the new crop to market soon after harvest, ”said Vikas Chaudhary, an exporter from Nashik.

Rain damage

According to data from the Ministry of Agriculture and Agricultural Welfare, the modal price (rates at which most exchanges take place) for onion is currently ₹ 2,150 per quintal in the courtyard of the Lasalgaon Agricultural Products Market Committee ( APMC), the largest in Asia, down from ₹ 1,400 on September 13. .

Recent rains in the region had damaged stocks and traders were estimating this at 20-30 percent, Chaudhary said.

“Traders have raised onion prices, citing 25-30 percent damage to their stocks,” said M Madan Prakash, president of the Association of Exporters of Agricultural Products (ACEA).

He said the canned onion load delivered in Mumbai at ₹ 1,600-1,700 a quintal two weeks ago is now trading at ₹ 2,100-2,200.

Ajit Shah, president of the Horticultural Products Exporters Association (HPEA), wondered where the damage to stocks was reported. “As far as I know, no damage to onion stocks has been reported,” he said.

“Rainfall in the Nashik region has been higher this year. Therefore, stocks could have been affected, ”said RP Gupta of the National Horticultural Research and Development Foundation (NHRDF).

Export issues

“But onion prices this year will be lower and will not rise to the levels seen last year at this time,” he said. During the same time last year, the modal price for onion stood at ₹ 3,000 at Lasalgaon APMC before reaching a high of ₹ 5,400 on October 31.

Onion prices rose to ₹ 100 / kg at points of sale, forcing the Center to ban exports and allow duty-free imports. Both of them relaxed since January of this year.

Despite lower prices, onion exports have lagged this year. “They are expected to rebound after November. Exports have been hampered by high freight rates, especially to the Far East. Container availability has also been an issue, ”said HPEA’s Shah.

Pakistan Competition

“Exports are taking place although with a moderate note. The new crop from Pakistan has hit the market and this year, arrivals are higher, ”said Prakash from ACEA. As a result, shipments from the neighboring country enjoy an advantage.

“Pakistan stocks are from the new crop, while our offers are from the previous crop. Buyers naturally prefer new stock, ”Shah said.

Recently, Indian exporters lowered their supply rates by $ 15 (₹ 1,105) a ton, hoping to attract some demand. “There is no doubt that Indian onion enjoys a premium on the world market. The only problem is that overseas buyers, affected by the Indian onion export ban last year and in 2019, always seem to have other options, ”said Prakash.

“Pakistani tariffs have also started to increase. It’s moving some of the buyers to us, ”Shah said.

Currently, Pakistan is trading its onion at $ 300 (₹ 22,150) a free ton on board compared to India’s $ 400 (₹ 29,500).

“Our exports have been affected mainly because our prices are higher than those of competing countries. Traders are not making good margins, ”said NHRDF’s Gupta.

Shah said some traders had stocks at Rs 18,000-19,000 a ton, incurring another Rs 4,000-5,000 for storage. “Traders need to get their money back,” he said.

Kharif early harvest

Exporter Chaudhary said the upcoming early kharif onion quality is good and will start arriving from next month.

“Initially, we heard that there was some damage to the crop, but it has recovered. The quality is reported to be good, ”said Prakash.

“The early harvest of kharif onion is good, not only in Maharashtra but throughout the country. Farmers in many states, especially in the south, have planted onions this year, ”Gupta said, indicating that onion production could be higher.

Shah said that a correct picture of the harvest would be available only after October 15.

The onion has three harvests: the early kharif harvest begins to arrive in mid-October, while the late kharif harvest will hit the market around the New Year. The rabi onion harvest comes after April.

In 2019 and 2020, the onion harvest was affected by untimely rains in states such as Karnataka, Madhya Pradesh and Maharashtra. Both years, retail prices soared to ₹ 100 per kg during October-November, forcing the Center to intervene to control the price increase.

According to the second advance estimate from the Ministry of Agriculture and Agricultural Welfare, onion production last season (July 2020-June 2021) was projected at 29.92 million tons (mt) compared to 26.28 mt in 2019 -20 and 26.10 in 2018-19. .

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