Hoarding is one reason for soaring onion prices in major metros. But farmers from onion-growing states are also to blame.
“Thanks to the sudden rise I am able to sell my crop for Rs45-50 per kilo. But middlemen and wholesale dealers are also cashing in big time as they are able to escalate the price by almost 5%,” said Suresh Kumar, 45, a farmer from outer Delhi.
The commission agent charges 5% on every sale, he said. The agent, in turn, sells them to a wholesale dealer with a margin of about 20%. Wholesale dealers add their margin and by the time it reaches to end consumer, it becomes dearer by at least 45 to 50%.
One of the wholesale dealers contacted by dna in Azadpur mandi in Delhi, one of the biggest vegetable markets in the country, said that they too are buying onions for not less than Rs50-55 per kg from local farmers. “We are also paying high prices to the farmers and, after adding our margin, we sell it at Rs65-70 per kg,” he said.
Ther are other reasons for the high prices, such as inadequate supply from states like Maharashtra, Karnataka and Andhra Pradesh. Also excessive rains have affected the supply of post-kharif crop. “However, supply from Rajasthan is continuous and prices can be controlled with it,” said a wholesale dealer.
Onions from Nashik and Karnataka are better in quality compared to those from Rajasthan that’s another reason why cost of onions has gone up. again, historically, it has been seen that even if supply is constant or high, prices shoot up towards the end of the year, mainly because of the poor shelf-life of kharif and late-kharif crops which come to market from October to January, that farmers tend to sell the produce immediately. “The fluctuations in market happens during November to January when the kharif crop comes to market,” says a 2013 NABARD report. “The average prices of kharif and late-kharif crops are higher; the production is highly uncertain due to fluctuations in monsoon and high incidence of pests and disease during the period. This has led to high price fluctuations of onion in recent years.”