Onion prices up 10-fold this year but imports from Afghanistan, Turkey take off further sting from spiralling rates

  • Onion price touched Rs 200 per kg in some retail shops of Bengaluru, after its wholesale rate ranged between Rs 5,500 and Rs 14,000 per quintal

  • The price of onions will continue to be high for some time as daily arrivals of the early kharif crop at Lasalgaon market in Maharashtra for instance has been sharply down

  • MMTC has contracted 11,000 tonnes of onion imports from Turkey and the consignments are expected in January next year.

As onion prices in India have soared tenfold this year, Mukesh Thoke, a restaurant owner on the outskirts of Mumbai, faces a dilemma—raise prices or take a hit on margins. The price of onions shot up to a whopping Rs 200 per kilo in Bengaluru due to severe short supply in the market while prices hovered around the Rs 100-105 per kilo bandwidth in Mumbai. Onion prices hovered around Rs 96 per kilo in Delhi, Rs 100 in Bhopal, Rs 90-100 in Raipur and Rs 120-165 per kilo in Kerala, according to market reports. On e-commerce platforms, the price of onions ranged from Rs 95 to Rs 110 for a kilo. In Panaji in Goa, the rates were as high at Rs 165 per kilogram. In fact, the average price of a kilo of onions across 114 cities came to over Rs 100, according to official data.

"Onion price touched Rs 200 per kg in some retail shops of Bengaluru, after its wholesale rate ranged between Rs 5,500 and Rs 14,000 per quintal," state agricultural marketing officer Siddagangaiah told IANS.

Widely used in Indian cuisine, onions have hit record high prices of Rs 200 per kilogram in some cities this year after untimely rains damaged crops, sparking a nationwide outcry, questions in Parliament, onion thefts in the country, a Reuters report said.

“People come to our restaurant for non-vegetarian food which requires a lot of onions. We can’t reduce onion usage as it would change the taste of our food,” said Thoke to Reuters, who currently shells out Rs 22,000 every week for onions, up from Rs 2,500 at the beginning of the year.

 Onion prices up 10-fold this year but imports from Afghanistan, Turkey take off further sting from spiralling rates

Getting costlier. Reuters

Some analysts even believe the price surge played a direct role in the Reserve Bank of India’s surprise move to hold rates steady last week. “We advise investors to track onion prices as they hold the key to the next RBI rate cut,” said BofA Securities in a note to clients on Tuesday.

With Finance Minister Nirmala Sitharaman having to fend off questions in Parliament last week around the surge in onion prices, the government has moved to not only ban exports of the vegetable but also rush to import from places like Turkey and Egypt.

But the moves have failed to soften the price of onions, which are now more expensive than apples and pomegranates.

Unlike Thoke, other restaurateurs have begun to use fewer onions, or have started using alternative fillers like cabbage.

“We can’t afford it. We have definitely reduced the quantity of onions we used,” said Nagarajan D, owner of Sendhoor Cafe, a south Indian restaurant chain.

Even households are being forced to change their diets.

“We can’t afford to spend 150 rupees or more for a kilo of onions. The government should do something to bring down prices,” said Parvati Patil, a Mumbai-based housewife.

The price surge has forced a few state governments to start selling onions at a subsidised price, in the same manner as the country does for grains such as wheat and rice.

“Even those who stopped buying food from the public distribution system long ago are queuing up for onions,” said an official from the state of West Bengal, which has struggled to manage queues of buyers.

The price of onions will continue to be high for some time as daily arrivals of the early kharif crop at Lasalgaon market in Maharashtra for instance has been sharply down to the range of 3,000-5,000 quintals from 10,000 to 15,000 quintals earlier, according to wholesale traders in Lasalgaon.

Govt imports onions from Afghanistan, Turkey

The government has been proactive and has initiated a few steps like importing onions from Afghanistan and Turkey. State-owned trading firm MMTC, which is importing onions on behalf of the Centre, has placed an order of 11,000 tonnes of edible bulb from Turkey as part of its efforts to boost domestic supply and ease soaring prices, sources said to PTI.

This is the second import order placed by the MMTC. The public sector firm is already importing 6,090 tonnes from Egypt, the report said.

Last month, the Union Cabinet approved importing 1.2 lakh tonnes of onions to improve the domestic supply and control prices that have skyrocketed to Rs 120-150 per kg across major cities now. The Centre has already banned exports and imposed stock holding limit on wholesalers and retailers for indefinite period.

According to sources, MMTC has contracted 11,000 tonnes of onion imports from Turkey and the consignments are expected in January next year.

The government should have done this earlier, said Gurbaxish Singh Kohli, Vice President- FHRAI. "That crops were spoilt due to unseasonal rains was known. Though we appreciate what the government is doing with regard to imports, we wish they had woken up earlier and taken this step of importing onions earlier. The government lacks vision and wakes up at the eleventh hour," he said.

--With inputs from agencies

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Updated Date: Dec 12, 2019 09:09:59 IST