Decoding onion price hike reasons

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onion price hike

Consumer Affairs Minister said onion price increased because Kharif crops fell short


The price of onion has been an increasing trend for more than two months. The current price of onion has reached more than 100 Rs per kg in many states. The looming price hasn’t just become a migraine for the citizens but also for the NDA government. The Modi-led BJP+ government is already facing criticism over slow- economic growth of the country.

However, the onion crisis is not new in India. Onion price had reached Rs 100 per kg in 2013 too. Onion price has gone so high that thieves are opting to steal onions rather than cash.

The fresh hike in onion hasn’t just affected the common households, but also it has reached to the restaurants. The consumption of onion has also decreased affecting the wholesalers, farmers and retailer and traders.

The government in October banned the export and imposed a stock limit on traders to stabilize the increasing rates. The government has even increased the Minimum Export Price for onions to $850 per ton. It made difficult for traders to export.

It is expected that onion prices will come to ease in two months as the price will start decreasing gradually from after a week.

Reasons for the onion price hike

Heavy unseasonal rains causing wet field in all major onion-growing states is said to be primary reasons for the onion price hike. States like Maharashtra, Telangana and Karnataka who contributed to the larger part of onion production were hit by unseasonal heavy rains.

Maharashtra has witnessed nearly one and a half time more rain than normal in Maharashtra from October 1 to November 6. In Karnataka and Telangana rains doubled from the year before, almost 65 per cent more than usual. The unseasonal flood damaged about one-third of the Maharashtra crops.

Read more: BJP-ruled-area shrinks to 40% from 71% after Maharashtra loss

Farmers in all these states haven’t been able to harvest crops because the fields are submerged in water. They weren’t able to produce enough onions to meet the demand of the market, resulting in increased price in the wholesale market by more than 120 per cent. In the Lasalgaon market, Nashik the price of onion was Rs 25 per kg on October 19 per kg which went to Rs 55 per kg on November 4. Lasalgaon sets the benchmark of onion selling across the country.

Consumer Affairs Minister Ram Vilas Paswan, LJP leader said on Thursday that the price of onion rose because Kharif crop fell short by 30 per cent to 40 per cent in 2019. Top government officials and traders have countered Paswan’s statement. They said that enough Kharif crop is available, but the harvesting has been delayed.

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