Onion growers demand better prices, market points to low exports

Across wholesale markets in Nashik — the onion belt of Maharashtra –the kitchen staple is now trading at around Rs 1,100-1,200/quintal. Lasalgaon’s wholesale market in Niphad taluka of Nashik district, known as the largest onion market in the country, has seen average prices also ranging in that range. Prices which were Rs 1,437/quintal in March had dropped to Rs 9,33/quintal in May to again correct to Rs 1,205/quintal in July. The average price at present is Rs 1,136/quintal.

According to Bharat Dighole, president of the Onion Growers Association, the present price range in Nashik does not even cover the cost of production for farmers. Dighole and other farmers have declared that they will not sell their produce as long the average price in the markets is not guaranteed to Rs 2,000/quintal. Farmers, for their part, point to higher cost of labour, seed and inputs, which has raised their cost of production.

While most traders said that the kharif sowing has been good, concerns about the fate of the crop in case of heavy rains in September-October remains high. Nashik and other onion-growing areas have reported heavy rains during the harvest season over the last few years. In case the same happens this year, prices will be affected. Given the higher storage losses, farmers might have lesser storage available to offload before the next crop is ready.

Traders and exporters also talk about lack of demand in the international markets. Ajit Shah, president of All India Onion Exporters Association, said demand for onions in traditional markets like Gulf countries, Bangladesh and Sri Lanka has dipped. While the economic crisis in Sri Lanka had put a stop to exports, India starting a Line of Credit has seen traders sending consignments to the island nation. Danish Shah, one of the largest exporters in the country, said quality concerns have taken a toll on the produce. “Storage losses are higher this year,” said Shah.