Onion prices rebound after last week's dip

Pune: Onion prices at Maharashtra's benchmark Lasalgaon wholesale market have rebounded from last week's over 9% fall, signalling that the government's market intervention and action against hoarders failed to sustain downward pressure.

On Tuesday, the average wholesale price of the kitchen staple was about ₹40 per kg, up by 7% from ₹37 last week, while its retail price remained elevated in the ₹60-70 per kg range.

At Lasalgaon, Asia's largest onion market, the maximum wholesale price touched ₹48 per kg on Tuesday, a new high.


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Industry insiders said there was fear among onion traders last week of government action against overstocking, which led to a fall of ₹4-5 per kg in wholesale prices.

"Prices had responded to the atmosphere of stern action on sugar traders and police raids," said an exporter who did not wish to be named.

However, as onion prices have increased after staying subdued for two years, farmers are looking forward to covering their losses, said experts.

Jaydatta Holkar, director of Lasalgaon Agricultural Produce Market Committee (APMC), said that though onion prices have doubled in the last four to five months, farmers have suffered quality and weight loss in storage, as it was harvested four months ago. "The government should not intervene to suppress the prices," he said.

The prices have been rallying due to expectations of delay in the kharif crop and concerns about quality of the stored crop. Sources from Nashik told ET that loading of the buffer stock of onion is taking longer as its quality is poor.

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"The exports have been tepid at present due to various challenges like freight and some buyers shifting to China," said Vikas Singh, vice president of Horticulture Produce Exporters Association.

Meanwhile, the government, in a statement, has claimed that onion prices have started cooling in centres such as Varanasi, Amritsar, Delhi and the nearby markets, where sale of onions from buffer stock has started.