Why onion prices have drastically fallen in wholesale markets?

In a major relief for common people, onion prices have come down. The wholesale price of onion in Lasalgaon of Nashik, the country's largest onion market, has suddenly fallen. From Rs 6,191 per quintal on Monday, the wholesale price came down by Rs 1000 per quintal on Tuesday.

Onion prices have come down to Rs 5,300 per quintal in Lasalgaon mandi. Similarly, other varieties of onion are being also available at the rate of Rs. 4100 and poor quality onion is available at the rate of Rs 1500 per quintal. Retail prices will also come down soon due to low wholesale prices.

Retail prices of onions are between Rs 80-90 in many parts of the country. It was feared that if the prices of onions were not controlled now, by Diwali prices would reach Rs 100 per kg. But now after a sharp drop in wholesale prices, retail prices will also be lower. 

The government has also claimed that onion prices will come under control before Diwali. Here's what steps the government has taken so far to control the prices of onions, the effect of which have started showing.

1. To keep the price of onion under control, the government had on October 23 raised the stock limit on onion to 25 tonnes.
2. Onion has also been given to states from the buffer stock. NAFED has started sending 1 lakh tons of onions to the market.
3. NAFED has on Saturday sent a tender for the import of 15 thousand tons of red onion.
4. To stop the price of onion, the government had banned its export in September itself.
5. Government on Friday gave exemption in the import of potato from Bhutan, the license requirement has been eliminated and additional 10 lakh tonnes of potatoes have been allowed to be imported under the tariff rate quota scheme.
6. Now before the stock limit is implemented, 3 days time will be given for grading and packing in the onion market from the date of purchase.
7. Onion is being transported to every corner of the country through Kisan Rail.
8. So far 7000 tonnes of onions have arrived in the country. Apart from this, around 25,000 tonnes of onions are expected to come by Diwali.

Apart from these, another major reason is that the price of onion will be reduced even after the arrival of the new onion crop. A new crop will also come soon in the market. 

Why onion prices suddenly increased

Heavy rains have damaged onion crops in the fields. Whatever onion is coming in the market is of March and April yield. The biggest thing is that onion inflow has also decreased in mandis. The influx of onions in Pune's wholesale market has come down from 500 trucks to 150 trucks per day. That is, on normal days, where 500 trucks reached every day, now only three quarters are coming.

1. Onion is a seasonal crop grown in India two to three times a year.
2. Onion grown by the end of March fulfills the demand till the end of October and beginning of November.
3. In between, fresh onion crop comes from southern states in the month of August.
4. By mid-October, the initial Kharif onion crop also starts reaching the markets.
5. By the middle of November, the yield of the Kharif crop falls in the late Kharif season.
6. This year, the erratic monsoon broke this cycle.
7. Due to heavy rains, nearly 50 percent of the Kharif crop in southern states including Andhra Pradesh, Telangana and Karnataka were destroyed.
8. Not only this, the wholesale market of Pune, but also Lasalgaon in Nashik has deteriorated the buying and selling equation.