Why Onion Prices fluctuate in India

Onion prices fluctuate in India

After China, onion production is highest in India. India is also a major exporter of onions. Onion accounts for 7 to 11 per cent of the total production.

 Onion Prices fuctuate in India

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November 2010:In 2013 and 2015
Due to excessive rains in many areas in Nashik, onion supplies were delayed in onion markets. The then Manmohan Singh government immediately took a decision to ban exports, reduce import duties and import from Pakistan. Onion prices have risen several times in 2013 and 2015. In Delhi, onion was sold at a price of Rs 80 per kg in the retail market in 2015. At that time the government had controlled the situation by importing from Pakistan and Afghanistan

Farmer unhappy

The ban on export of onions discourages farmers. Farmers in Maharashtra are not happy with the stock limit and export ban. Retailers will now be able to store onions for 100 quintals and wholesale dealers up to 500 quintals. A week ago, the government increased the minimum export price of onion so that there could be some restriction on its going out of the country. An official of the Consumer Affairs Department said, "There were reports of sending onions to Bangladesh and Sri Lanka at low MEPs even after increasing the minimum export price." So it was decided to stop the export altogether.

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Why does onion price fluctuate

There are three onion crops in the country. Kharif, Late Kharif and Rabi. Overall production is more than 60% in all three seasons. Onion prices rise between July and September and the market becomes slightly dependent on the rabi season onion. Apart from this, onion prices in domestic market also depend on APMC tax, commission agents fees, export orders etc. Maharashtra contributes 35 percent to the total production of about 23.5 million tonnes of onions in the country Production should be boosted in Kharif season. Currently, more than 60% of the total production comes from Maharashtra, Madhya Pradesh and Karnataka. Other states like Uttar Pradesh should show more interest in onion production.