Malaysians face pricey Indian onions as fresh supply delays cloud Deepavali festival

As Malaysia prepares for the upcoming Deepavali festival on November 8, onion prices may rise due to a significant decline in supply, reported Bernama. Maharashtra, India's leading onion-producing state, is experiencing a nearly 40% drop in production this year due to irregular rainfall and prolonged dry spells. This shortfall has been exacerbated by the effects of El Niño, which has led to insufficient moisture for onion crops, putting strain on farmers and contributing to price volatility in local markets.

The Lasalgaon Agricultural Produce Market Committee, located in Maharashtra, is a crucial hub for setting onion prices in India. With millions of Hindus celebrating Deepavali around the world, the demand for the pungent, colorful, long-lasting onion is expected to surge. India, the second-largest onion producer globally after China, grows approximately 30 million tonnes annually and exports about 1.5 million metric tonnes.

Malaysia relies heavily on Indian imports, with over half of its onion supply coming from Maharashtra. The current price for fresh onions in India is around 60 Indian rupees (0.63 cents/RM2.56) per kilogram, while export prices range between US$500 and US$700 per metric tonne, depending on the destination. Lasalgaon's chairman, Dnyaneshwar Kisan Jagtap, anticipates that onion production could recover post-Diwali, as recent rainfall has encouraged crop growth.

However, the market remains sensitive to supply conditions, and prices may ease if the overall onion supply improves.