As tomato prices in India continue to rise, there are indications that onion prices might also experience an increase, potentially reaching ₹60-70 per kg in September. A report from Crisil Market Intelligence and Analytics suggests that a supply-demand imbalance is anticipated, particularly towards the end of August. The report forecasts a significant price hike from early September, though prices are expected to remain below the highs witnessed in 2020.
One of the factors contributing to the expected price surge is the reduced shelf life of rabi onions by 1-2 months. Panic selling that occurred in February-March this year has led to the depletion of rabi stocks in the open market, which is likely to result in tightened supplies and higher prices. This situation extends the lean season by 15-20 days, leading to concerns about onion availability and cost.
Farmers have reported substantial damage to stored onions due to heavy rainfall over the past month, leading to decreased supplies. This situation is further expected to contribute to the potential price surge.
While a government official mentioned that there is no immediate concern due to sufficient stocks and monitoring of demand and supply, analysts predict that onion prices are likely to rise. The lower acreage under rabi cultivation in the 2023 season, combined with reduced realizations for farmers in the previous season, might contribute to the price increase. Additionally, high temperatures in February led to the early maturity of onions, decreasing their shelf life and adding pressure on prices.
The projected surge in onion prices adds to the broader concern about rising food prices in India. It highlights the complex interplay of factors such as weather conditions, supply-demand dynamics, and cultivation patterns that influence the cost of essential commodities in the country.
