Onion prices continue to fall, increasing losses for farmers
Alekh Angre 22 December 2011

Onion prices for traders have fallen to Rs600 per quintal on Wednesday from Rs1,200 per quintal earlier this month however there is little change in retail prices

Exactly a year after it made consumers to cry, onion prices are now causing losses to farmers. Last December, amidst the high festivities of Christmas and New Year, onions made the consumers to cry with prices touching as high as Rs80 per kg, while this year farmers are reeling under the losses due to the crashing prices. Experts and traders are warning of further downtrend in onion prices.
At Lasalgaon near Nasik, which is the country’s largest onion producing region, prices in the wholesale market have to fallen to Rs400-Rs500 per quintal due to excess production and storage. High export prices have also resulted in poor off take by the traders.

In Mumbai market, the modal prices (rate at which traders buy) of onion have fallen to Rs600 per quintal on Wednesday from Rs1,200 per quintal earlier this month. Meanwhile, the prices of onions from Karnataka have also drastically fallen.

However, there is little change in the retail prices of onions at Vashi retail market, near Mumbai. Onions are being sold at Rs12-Rs14 per kg, compared with Rs14-Rs16 a kilo last week.
“The cost of production for a quintal of onion comes at around Rs300-Rs400 while the current price is Rs400-Rs500 per quintal. At this price the farmers cannot even expect to recover their costs and this makes it impossible to sustain the business. We want the government to immediately take corrective measures to safe guard the interest of the onion growers,” said RP Gupta, director of National Horticultural Research and Development Foundation (NHRDF).

 For 2011-12, the onion production so far, according to NHRDF, is estimated at 150 lakh metric tonne, an increase of 4-5% compared to last year.

Experts demand that the lowering export prices could boost demand for Indian onions in international market. “The minimum export price should be brought down to $150 per metric tonne from $250 per metric tonne,” says Mr Gupta.

A Vashi-based trader told Moneylife that, “Governments, both the state and union, should immediately intervene to help the farmers who are bearing losses on the crop. It should also reduce the minimum export price. Even if there is excess production, people continue to shell out higher price in the retail market.”

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