In Lasalgaon, Nashik, Maharashtra, a significant drop in the average mandi prices of onions has been observed, plummeting by 50% to $25/quintal from the previous $50/quintal. This shift is attributed to the fresh kharif crop arrivals. The inability to store the kharif harvest of onions due to its higher moisture content has led to a prediction of continued price declines unless the 20% export duty is lifted to encourage exports.
According to Jaydutt Holkar, director of the agricultural produce market committee (APMC) in Lasalgaon, the surge in onion arrivals across key states such as Maharashtra, Madhya Pradesh, and Gujarat has contributed to the falling mandi prices. Conversely, removing the export duty could potentially invigorate demand and prices. The production cost of onions ranges between $21.25 - $22.50/quintal, positioning farmers at a loss if mandi prices dip below these figures.
Despite the decline, retail prices remain elevated, deterring the initiation of an export duty reduction. However, with the robust arrival of kharif crops, expectations lean towards a softening of retail prices in the forthcoming weeks. Maharashtra's Deputy Chief Minister, Ajit Pawar, has advocated for the removal of the 20% export duty on onions to the Commerce Minister, Piyush Goyal, highlighting the price drop due to new crop arrivals.
Onion retail inflation in November stood at 5.59%, a stark contrast to the previous year's 86%, attributed to a high base effect. The positive impact of timely monsoon rains on kharif crops, including onions, is noted. The area under kharif onion cultivation has seen a 27% increase, although the 2023-24 crop year projection indicates a 20% reduction in onion output due to a decrease in rabi production.
Source: Financial Express