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

Malaysians could face higher costs for Indian onions during the Deepavali festival, as production in Maharashtra, India's largest onion-growing state, is expected to drop by nearly 40% due to poor rainfall. Irregular monsoon rains and a prolonged dry spell have delayed the arrival of fresh kharif onions, the monsoon-season crop.

This has led to a potential 30-40% decline in production, according to Dnyaneshwar Kisan Jagtap, Chairman of the Lasalgaon Agricultural Produce Market Committee in Maharashtra. Lasalgaon is Asia's largest onion market and serves as a key center for setting onion prices in India.

The Deepavali festival, celebrated by millions of Hindus worldwide on November 8, is a significant occasion where the reddish, pungent, and long-lasting onion is a crucial ingredient. India, the second-largest onion producer globally after China, produces around 30 million tonnes annually, with more than 50% of its onion exports coming from Maharashtra.

Malaysia relies heavily on India for its onion supply, importing over 50% of its onions from the country, with Maharashtra contributing significantly to these shipments. Currently, Indian consumers pay about 60 Indian rupees (0.63 cents/RM2.56) per kilogram, while export prices range from US$500 to US$700 per metric tonne, depending on the destination.

Industry players hope for improved crop growth post-Diwali, as recent rainfall has been observed. However, the market remains sensitive to supply conditions, with prices expected to remain volatile. As fresh kharif onion arrivals increase, price pressures may ease, but the extent of any price correction will depend on actual production, market arrivals, and demand.

The Indian Consumer Affairs, Food, and Public Distribution Ministry has stated that fresh kharif onions are starting to arrive from major producing states, including Karnataka, Andhra Pradesh, and Rajasthan. This expected increase in supply, alongside the availability of stored stocks, is projected to enhance overall onion availability in consuming markets during the upcoming festive season.