The relentless rise in onion prices has thrown households into a whirlwind of economic stress. Much like the record-high tomato prices before, the public is now grappling with the surge in onion prices across the country. Recent data from the Department of Consumer Affairs has revealed that, within a mere two weeks, the average wholesale price of onions at the Lasalgaon APMC in Maharashtra has witnessed an alarming 60 percent increase. But what is driving this surge, and how long will it persist?
Causes of the Onion Price Surge
The surge in onion prices can be attributed to a dire lack of supply in the market. With the shortage of onions, consumers are feeling the pinch in their pockets. This price escalation is projected to persist until December when fresh stock is expected to hit the markets by year-end. However, the supply of onions has been significantly hampered by the deficit monsoon this year. In certain regions, a lack of rainfall has affected onion production by nearly 10 percent.
The Price Surge: Not a Sudden Phenomenon
The increase in onion prices did not happen overnight. Back in August, the government imposed a 40 percent duty on onion exports, and prices were already on an upward trajectory due to delayed and reduced sowing of the kharif crop. To keep the surge in onion prices under control, the government resorted to procuring onions in the wholesale markets at a fixed price below the market level.
Impact on Consumers
In the past month, the average wholesale price of onions has surged by a staggering 26 percent, and the average retail price has followed suit, increasing by 22 percent in the last 30 days. On October 26, 2023, onion prices reached as high as Rs 70 per kilogram in certain parts of the country, compared to Rs 33 per kilogram just a month earlier.
Nandkumar Shirke, Chairman of the Association of Onion Traders in Ahmednagar district, expressed his concern, stating, “The average price of onions in Ahmednagar market has increased from about Rs 35/kg around 10 days ago to Rs 45/kg now.” He further noted that the supply of stored onions has also dwindled by 40 percent in the last two weeks.
The surge in onion prices is a matter of concern for both consumers and traders. While the government has taken steps to control the situation, the impact on the market and households remains significant. The trajectory of onion prices in the coming months will be closely watched, as the nation navigates these challenging times.
