As the demand for onions ahead of Eid-ul-Adha (Bakra Eid) has increased, the prices of this commodity have increased by almost 30 to 50 percent in the last two weeks.
Now, in the hope that the central government would relax its measures and interventions, mainly to control the rising prices, traders have started hoarding onion stocks, according to a report in the Economic Times.
At a mandi in Nashik, the basic wholesale price of one kg of onions stood at Rs 26/kg on Monday. This price was up from Rs 17/kg reported on May 25.
On the other hand, premium onions are now being sold at over Rs 30/kg in several wholesale markets in Maharashtra. These premium onions are expensive, even though they represent only a small proportion of the total trading volume.
According to the ET report, the main reason for this price surge is the disparity between supply and demand.
Farmers and stockists are hoping that the government will eliminate export tariffs, according to Ajit Shah, head of the Horticultural Produce Exporters Association.
« One of the main reasons for the price hike is that farmers and stockists are optimistic that the central government will remove export duties. Based on this assumption, they are holding onions by expecting a rise in prices,” Shah said.
Onions are supplied from stocks held by farmers and traders and reach the markets from June. Due to the expectation of higher prices resulting from an expected decline in the rabi crop for 2023-24, farmers are reluctant to sell their stocks.
Onions continue to be in high demand domestically despite slow exports caused by a 40% export levy, particularly in the run-up to Eid-ul-Adha on June 17.
“There is a high demand for onions from Maharashtra, especially in the southern states,” Vikas Singh, an onion trader from Nashik in Maharashtra, told ET.