Retail onion prices rise to Rs 43.53 per kg as weather disruptions, delayed monsoon and festive demand tighten supplies
Onion prices have risen sharply across India, with the all-India average retail price increasing 59 per cent year-on-year to Rs 43.53 per kg on 24 August, according to data from the Ministry of Consumer Affairs.
In response to the price increase, the Centre on Tuesday announced the ‘Kanda Express’ initiative, under which special freight trains will transport onion stocks from Nashik to major cities experiencing supply constraints, according to the Ministry of Food and Consumer Affairs.
The average retail price stood at Rs 27.37 per kg during the corresponding period last year. The increase has also been reflected in wholesale markets, where the average price climbed 68 per cent year-on-year to Rs 35.58 per kg, compared with Rs 21.23 per kg a year earlier.
Prices in some major cities have increased even more sharply. In Delhi, onions were retailing at Rs 65 per kg on Monday, against Rs 35 per kg during the same period last year. In Chennai, the price rose to Rs 58 per kg from Rs 33 per kg a year earlier.
Weather Disruptions Affect Onion Supply
Unfavourable weather conditions have affected onion availability, particularly supplies from Maharashtra, the country’s largest onion-producing state.
The Rabi onion crop, harvested during March and April, is generally stored and released into markets across the country until October. Unseasonal rainfall and hailstorms in Maharashtra during the harvest period damaged crops and affected the availability of stored onions, putting pressure on supplies.
With reduced availability in the market, prices have moved higher amid sustained demand.
Delayed Monsoon Disrupts Kharif Crop
The delayed arrival of the monsoon has added to concerns over future onion supplies. The Kharif onion crop is typically harvested between September and November, but farmers had to postpone sowing in several areas because of the delayed rains.
The disruption to the cropping cycle could further tighten supplies in the coming months, adding to the upward pressure on prices.
Wholesale Prices And Festive Demand Add Pressure
Wholesale onion prices have also increased amid supply constraints caused by erratic weather conditions. The Centre raised the procurement price of onions to Rs 26.45 per kg in May from Rs 12.70 per kg, reflecting the changing market conditions.
According to Agrospectrum India, wholesale onion prices increased 32 per cent from the previous week, 43 per cent over the previous month and 119 per cent compared with the year-ago period.
The increase in wholesale prices has subsequently fed into retail prices. At the same time, higher demand ahead of the festive season has encouraged wholesalers to increase their inventories, adding further pressure to the market.
The Centre’s Kanda Express initiative is aimed at moving available onion stocks from surplus-producing areas to cities facing supply shortages, with the objective of improving availability and easing price pressures.
