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Dwindling stocks pushing onion prices up

Thursday, 3 July 2014 - 6:35am IST | Agency: DNA
Unseasonal rains, hailstorms and humidity have damaged the onion in Chaals, making much of it not fit for the market; Kharif crop has not been planted as there is no rain

Delayed monsoon and reducing stocks are pushing up the price of onion, which was auctioned at Rs 2,400 per quintal at Lasalgaon Agriculture Produce Market Committee (APMC) wholesale market on Wednesday. The lowest was Rs 900 and the average price Rs 1,950 per quintal. Prices have been going up since June 25.

The average price was Rs 1,600, it went up to Rs 2,000 on June 28. On June 30, it dropped to Rs 1,923 and saw a further fall to Rs 1,850 on July 1. It picked up on Wednesday by about Rs 100.

"Prices depend on onion arrival. Supply has begun to come down. On July 1, arrival was 1,550 quintals, it dropped to about 1,350 quintals on Wednesday.

"What is being supplied to APMC is the summer stock. Stocks are depleting, so the fall in supply and rise in prices," said an APMC official in Lasalgaon.

Summer stock is the onion stored and used till the Kharif harvest is ready for the market (over the next few months). Onion is stored in barracks called 'Chaal'.

Unseasonal rains, increasing humidity, hailstorm and winds have damaged the onion in the Chaals, making much of it not fit for the market. While some got drenched and decayed, some of the bulbs have developed stems. There were complaints of onion turning black in the affected regions.

"The price rise is benefiting only a handful of farmers whose crop wasn't damaged in the hailstorm and unseasonal rains. Most farmers faced the brunt of nature's fury, and have no stock, so where will they get money from?" asked Rajaram Bachchav, an onion farmer in Malegaon.

This supply-demand chain disruption is likely to continue for some time, more so if the rains do not drench the fields soon.

"The reasons are obvious. Firstly, summer stocks are depleting, secondly, kharif sowing has not taken place. Normally, summer onions have a storage loss of about 25%. However, this time the loss is around 40-50%. Summer stocks normally last up to November. If it rains now that will become possible, if not the situation is likely to be grim," opined Suresh Bhor, a farmer in Chandori, Niphad.

Kharif sowing normally takes place after the first June showers. The crop is then ready for harvest in Sept-Oct. However, till now, farmers have not even taken saplings, leave aside planting them. If it rains in the next two weeks, sowing will be take place immediately and saplings will be ready to be planted by August, and harvest can take place by December. "However, all depends on rains," said Bhor.


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