Politically sensitive onion prices may move north early Oct

NEW DELHI: The country may face a huge shortage of onion before the onset of winter because of a late monsoon -- a development that could spike prices and haunt the government for days to come.

A jittery government, already battling against the surge in prices of essential food items even when inflation is in the negative zone, then may resort to make exports costly to ensure maximum supply of onion.

"There could be pressure on the prices of onions due to a decline in supply towards October, thanks to the late monsoon in some parts of major producing states which has delayed the early Kharif sowing," a senior official of the agri- cooperative and nodal agency for onion exports, Nafed, said.

He said the storage level this year has remained high at almost the last year's level of 25 lakh tonnes. But even then, the stocks may not be enough to tackle demand, he added.

Though onion prices may not surge for the time being amid good amount of stocks in Maharashtra, Gujarat and Rajasthan, consumers may begin to feel the pinch once the stocks get depleted towards the end of September, traders said.

Wholesale prices of onion in Lasalgaon, a major trading hub in Maharashtra, rose to Rs 611 a quintal as on July 24, compared with Rs 371 about three months ago.

Since sowing has been delayed, fresh onion crops may only come to the market towards October-end or in November, jacking up prices in early October, they said.