Onion prices soar as wholesale market sees sharp drop in arrivals

Over the past several weeks, onion prices in Pune have risen sharply, attributed to a significant decrease in the supply reaching the city's wholesale market. Local trader Yogesh Yadav explained that Pune usually requires about 125 trucks of onions daily, each carrying 10,000 kg, to satisfy consumer demand. However, only around 50 trucks are arriving now, causing prices to increase throughout the city.

Wholesale rates for premium quality onions are currently between Rs 35 and Rs 40 per kg, while older, lower-grade stock sells for Rs 30-35 per kg. The effects are also evident at the retail level, with prices across Pune ranging from Rs 45 per kg to over Rs 65 per kg depending on the area and quality.

Traders attribute the current shortage to unseasonal rains that damaged onion crops in April, reducing output. Another factor is the anticipated delay in the kharif crop, combined with ongoing exports, which are further tightening supplies. According to Yadav, if conditions remain consistent, onion prices may stay elevated at Rs 45-50 per kg until Diwali.

The government has intervened by dispatching its first 'Kanda Express' on Friday, delivering roughly 453.65 tonnes of onions from Nashik to Delhi. This measure aims to boost supply in the capital and nearby cities and alleviate price pressures. The step has caused wholesale onion prices in Nashik's Lasalgaon APMC to drop by around 10%, from Rs 4,250 per quintal to Rs 3,800 per quintal.

However, onion growers are not pleased with the government's action, feeling it was too late to help them. Nashik district president of the Maharashtra State Onion Growers Association, Jaideep Bhadane, criticized the timing, noting that authorities often respond swiftly to curb prices for consumers but rarely act similarly to support farmers when prices decline and losses accumulate.

Bhadane recalled that growers faced significant difficulties between March and July when wholesale prices regularly fell below production costs, estimated at around Rs 2,000 per quintal. They had requested Rs 1,500 per quintal in compensation for those forced to sell below viable rates, but their plea went unaddressed. Now, just as growers are beginning to recover, the release of buffer stock onions has caused another price drop, undermining the recovery.

The price surge is also affecting Pune's restaurants. Ganesh Shetty, president of the Pune Restaurant and Hoteliers' Association, mentioned that hotels were already struggling with increased LPG prices and other rising costs, and the expensive onions now add to their profit squeeze. He explained that onions constitute nearly 80% of the preparation cost in most Indian kitchens, especially for gravies and curries.

If onion prices remain high for another two to three months, hoteliers might have to increase menu prices to maintain profitability.