Onion prices crash below production cost

PUNE: Onion farmers could not recover their production cost this year. They are selling onions at 40% less than the last year's prices while exports have fallen 30% from April to September.

The prices have fallen due to higher supplies this year. Farmers are offloading carryover stocks ahead of the November harvest. Some are selling to raise cash for the Diwali festival.

Exports are considerably lower this year because there is ample supply from other countries and the minimum export price of the Indian onion is higher. According to statistics available with Nafed, the April-to-September exports this year is at 6.66 lakh tonne as against 9.34 lakh tonne done during the period last year.

The average monthly price last September was at Rs 1,350/quintal while it was at Rs 1,050/quintal this September at the Lasalgaon wholesale market. And prices remained firm at Rs 1,350/quintal last October while this October, they have fallen 40% to trade in a range of Rs 750/quintal and Rs 850/quintal.

"I could not make any money this year," said onion farmer Chhotu Desale from Ravalgaon in Malegaon taluka in Nashik district. He sold the last tranche of onions in his store last week.

Farmers held their stocks in August and September hoping for better prices. Higher cost of seeds, fertilisers, labour and other input costs have eaten into the margins. RP Gupta, president of the Nashik-based National Horticulture Research and Development Foundation, said, "Onion prices are ruling lower because arrivals to the market are more than the demand due to higher onion storage this year. Farmers are not able to recover their cost of production."