Experts say onion prices, which have risen sharply in recent days, will begin softening in a week, provided it does not rain.
Retail rates in the national capital shot back up to Rs 80 a kilo, from Rs 60 earlier this month. The uptrend during the harvesting season was caused by heavy rain associated with Cyclone Phailin.
"This year, excess rains have played spoilsport," says Rajendra Sharma, General Secretary of the Azadpur Mandi Traders Association. "Excess water is an enemy of the onion. This year, harvesting has been affected in states such as Andhra Pradesh and Karnataka due to the downpour that accompanied the cyclone. Prices will come down in the next few days only if there are no rains." Arrivals from the onion-growing states of Andhra Pradesh, Gujarat, Karnataka and Maharashtra have been affected.
Sharma said wholesale prices in Delhi have gone up by Rs 10 to Rs 30-45 per kilo over the past week. High onion prices in the country drove inflation based on the wholesale price index (WPI) to a seven-month high of 6.46 per cent in September. In the same month, WPI inflation for onions stood at 322 per cent.
In markets in Maharashtra, the country's biggest onion grower, wholesale prices are hovering around Rs 50 a kilo. However, R.P. Gupta, Director at the National Horticultural Research and Development Foundation in Nashik, said it was only last year's stock that was commanding higher prices. "The old stock is almost exhausted, and the new crop from the kharif season is selling for Rs 30-40 a kilo wholesale. The harvest will only gain momentum, and the price should come down by the month-end." He added that the holding capacity of farmers has gone up with a rise in incomes and they slow down the harvest when prices come down.
India produces about 16 million tonnes of onions a year but consumes only 10 to 11 million. Higher domestic prices had led to the resumption of onion imports after a two-year gap, and onions from countries such as China, Egypt and Pakistan have found their way to Indian markets. Along with stepping up imports, efforts have also been made to discourage exports by raising the minimum export price.