Retail onion prices to fall 30% by Jan: Official

Retail prices of onion are likely to fall below Rs 40/kg by January from the current average prices of Rs 57/kg due to improvement in domestic supplies following the ban on exports last week, consumer affairs secretary Rohit Kumar Singh said on Monday.

“The spike in onion prices has been curbed through banning exports as well as offloading of buffers in the market,” Singh said.

As per the department of consumer affairs data, the modal retail prices of the key agricultural commodity has doubled to Rs 60/kg Monday from Rs 30/kg prevailed three months back.

Meanwhile onion prices in Lasalgaon, Nasik district, Maharashtra, the country’s hub for wholesale trade, on Monday fell by Rs 1000/quintal to Rs 2200/quintal from Rs 3300/quintal prevailed last week, traders told FE.

Retail onion inflation rose by 42.08% on year in October as retail prices in several cities touched Rs 90/kg last month because of delay in arrival of kharif crops and recent hail storms impacting the standing crops in in Maharashtra and Karnataka,

In October, the country exported 0.26 million tonne (MT) of onion, which was 77% more than the same month in 2022. The spike in shipment was despite the imposition of ‘high’ minimum export prices (MEP) at $ 800/tonne which translates into Rs 67/kg in October.

In the first week of the current month, the exports of onion was 0.04 MT which was equal to 22% of exports of 0.2 MT in December, 2022. “Continuing onion exports would have further reduced availability for domestic consumers,” Singh said.

During April-November of the current fiscal, India has exported 1.69 MT of onion mostly to Bangladesh, Malaysia, United Arab Emirates, Sri Lanka and Nepal.

India exported a record 2.5 MT of onion 2022-23, which is an increase of 65% from the previous fiscal.

Out of the total buffer of 0.51 MT in the current year, the department of consumer affairs through retail as well as wholesale interventions has offloaded 0.37 MT of staple vegetables to cool down the prices.

National Cooperative Consumers Federation of India (NCCF) and Nafed are currently selling onion from the buffer stock at a highly subsidised rate of Rs 25/kg to consumers in various towns.

The department through farmers cooperative Nafed and NCCF will procure 0.2 MT of kharif onions from the farmers and sell it through wholesale and retail interventions.

“We will continue to procure onions from farmers across key producing states and both wholesale and retail interventions will continue in high price markets,” Singh said.

The production of onion during the 2022-23 crop year (July-June) declined by 4% to 30.2 MT against 31.6 MT reported in the previous year because of lower rabi output.

India is the biggest producer of onion and Maharashtra, Madhya Pradesh, Karnataka and Gujarat have more than 70% share in the country’s production.