Onion Prices Likely To Drop In Two Weeks

PUNE: Onions, which continue to sell for over Rs 50 per kg in the retail market, could see a correction over the next fortnight. Traders expect wholesale rates to drop by at least 10 to 15 percent in the next 15-20 days. This is because the demand for the kitchen staple from southern states is dropping, leaving more stock for the local market. A major correction in prices, however, will only come in by mid-October.



According to wholesale traders, a fresh crop of onion grown in Karnataka is helping reduce the quantity of onions that Maharashtra is diverting to the southern states. According to the traders, the price effect of the surplus supply now available in the local market will be felt by mid-September.



"The onion crop in Maharashtra has so far catered to the demand from the southern states of Andhra Pradesh, Kerala, Karnataka and Tamil Nadu this year. This has not allowed prices to come down in the Pune market. But with Karnataka now ready with its own locally-grown supply of onions, the demand for the crop will now reduce," wholesale onion trader Ritesh Poman said.



According to Poman, some stock of the crop in Karnataka will also be reaching Maharashtra, which will help the state tide over time till mid-October, when the fresh crop from areas like Junnar, Khed, Ambegaon, Shirur, Sangamner and Nashik starts reaching the city. "We have received some supply already. More is expected to come in over the next few days," he said.



Sanjiv Khadke, administrator of the Agriculture Produce Marketing Committee said supply from Karnataka has helped bring down prices earlier as well. "The wholesale market operates simply on the forces of demand and supply. A few times when prices really shot-up in Pune, onion stocks brought in from other states had helped to stabilize the market," he said.



The wholesale market has seen a marginal correction in onion prices over the last couple of weeks, stabilizing on Monday at around Rs 45 per kg against the three-year high of Rs 55 per kg that it breached in mid-August. The rates continue to remain steep in the retail market, with shopkeepers continuing to demand not less than Rs 50 per kg, and even as high as Rs 70 for a kg in some areas.



Shivlal Bhosale, president of the Market Yard Commission Agents Association said retailers are not letting prices drop to make up for their losses. "Retailers usually account for spoilages and differences in the qualities of onions while fixing prices. There has been a drop over the last few days and we expect prices to fall even further in the next 15 days," he said.



Despite the drop, onion prices even now remain a far cry from their normal range, when they trade for as nominal as Rs 20 per kg in the retail market. Bulk traders also attribute the price trend to reduced exports, brought on by the poor supply. "With the onion produce this year being lower than usual, the government has pegged the export price at $650 for a tonne of onion to curtail the international demand and thus prevent a price-spiral in the country. Farmers are thus hiking their rates in the local market to make up for the loss in their earning," Poman said.

Source:- timesofindia.indiatimes.com