Know your 'onions': Who let the price rise

Onion prices have started cooling down again from past two days. But the traders have already made a few crores. Even though drought of last year and heavy rains in some states this year have been blamed for increase in onion prices, trader insiders say, the hike was, as usual, artificial, managed by the traders.

The state government claimed that it did not find much stocks with traders during its inspections. However, the sources say that these days, traders keep stocks of one or two days only and increase the prices continuously.

The increase in prices of Rs 10-15/kg was seen in a day, despite good arrivals. Again an increase in onion prices was seen when the wholesale markets opened at Lasalgaon, Pimpalgaon and Pune after being closed between August 9 and August 11. On August 14, the government decides to impose MEP after widespread reports about imports and the prices crashed by 20-30%.

How Lasalgaon/ Pimpalgaon traders ‘control’ onion prices?

Maharashtra once accounted for about 80% of the onion production in the country.

Its share in the country’s onion production has gradually reduced as onion production in other states like Bihar and Madhya Pradesh has increased consistently. Yet, Lasalgaon, the biggest wholesale market of onion in Asia, controls the onion prices in the country Trade sources say that traders from Lasalgaon keep in touch with traders in other major markets and ‘fix’ the rates as the market opens.

The maximum price is raised, usually only for one tractor, which contains 25 quintal onions, which pulls up the overall onion prices.