Onion Prices Still Surging In Parts Of India Causing Festive Season Woes

Onions are an integral part of Indian cuisine and a necessity in virtually every household and restaurant across the country. The recent uptick in onion prices has left people in many states questioning how much more expensive the upcoming Diwali celebrations will look if onion prices keep climbing. 

The current price rise has been attributed to drought-like situations and weather disturbances across major production belts like Karnataka and Maharashtra and as a result, the all-India average price increased by Rs 3.40 per kg to Rs 53.75 per kg on Tuesday. The government has also enforced a Minimum Export Price (MEP) of $800 per tonne on onions between October 29 and December 31 to dissuade exports and ensure a greater supply of onions within the domestic market. There has also been an initiative by the Department of Consumer Affairs to start releasing buffer stock in some states to help stabilise the market. 

In Maharashtra, the prices have touched Rs 80/kg and many retailers have called for government intervention. In Delhi and Kolkata, the prices are still hovering around  Rs 70 to 80 per kg despite the curbs imposed to counteract this. In Hyderabad, prices in neighbourhood mandis sit around Rs 90 per kg but consumers fear it may rise in the run-up to Diwali. 

Onions in India are grown in 3 major seasons, kharif, late kharif and rabi, however, only the rabi crop is suitable to store and has a longer shelf life. Contrary to situations like the tomato shortages earlier this year, the government holds large stores of onions and it’s estimated that of the 30 million tonnes produced yearly, consumption demand is at around 16 million tonnes. It’s expected that given the current decline of fresh crops coming from producer states, farmers will try to shift these stores to make up for the shortage. 

With all measures being taken to account for the current shortage, there is an expectation for prices to stabilise within 10 days to 2 weeks, however this still might put a pinch on the pockets of Diwali revellers this season.