Onion prices will stay high for some time; restrain or abstain like Sheikh Hasina, Nirmala Sitharaman

For a person who abjures tamasik food like onions (and perhaps garlic), Finance Minister Nirmala Sitharaman reacted with negativity, passion and restlessness, which are emotions associated with hot and spicy rajasik foods. Instead, foods like vegetables, fruits and grains which she presumably consumes should have induced in Sitharaman satvik calmness while replying to a question in the Parliament, instead of the “I don’t eat onions,” retort.

The consumers of onions have reacted with anger as retail prices touched and even crossed Rs 100 a kg, which is uncharacteristic, as according to the literature the presence of allyl propyl disulphides, which gives pungency to the bulb, is supposed to induce tamasik torpor, inertia and dullness in them. Perhaps these are symptoms of withdrawal caused by deprivation of the daily fix.

The onion consumers would be well-advised to get into a state of repose till at least the end of January, as daily arrivals of the early Kharif crop at the Lasalgaon market in Maharashtra this year have been in the range of 3,000-3,500 quintals, against about 10,000-15,000 quintals in normal times, Jaydutt Holkar, the director of Lasalgaon market yard said. The late Kharif crop is harvested from January onwards.

The delayed arrival of monsoon in the onion-growing regions affected the early Kharif crop. It pushed back transplantation and, the heavy, continuous and prolonged rain that occurred thereafter badly damaged the October-December harvest. Rains till the first week of November, also affected the late Kharif crop which is transplanted in October. Production from both the seasons at 52 lakh tonnes is estimated to be 26 percent less than during the two seasons in 2018 when about 70 lakh tonnes was harvested, the government told the Lok Sabha last week.

Farmers had also planted less area during the December 2018 and May 2019 Rabi season. Rabi accounted for 65 percent of the annual production last year. They had shrunk the acreage because the prices had crashed. The average wholesale modal price in the Lasalgaon market last December was Rs 761, but the minimum was as low as Rs 101 a quintal.

Santosh Gorade, 38, a farmer from Takali Vinchur village in Nashik’s Niphad taluka, said he was able to plant just two acres this monsoon season against 6 acres last year because the rain damaged the seedlings and he had to replant with whatever little seed was left. Against 110 quintals an acre, Gorade expects a harvest of 40 quintals. The prevailing high prices have not benefitted him, he said. He has just started harvesting. Last year he had dumped onions around this time as they were selling for so low he would not have recovered the cost of transportation.

It is the Rabi season harvest, which being well-dried keeps the longest. Farmers sell it in instalments till November and December. But this year, even this harvest got spoilt due to high humidity, says Kalyansing Baburao Patil, senior vice-president of Jain Irrigation, which has 5,000 onion farmers on contract. It supplies dehydrated onions to fast-food chains like Domino’s Pizza and the military.

The government was aware of the situation. In June, it withdrew export incentives. But it had to tread gingerly before taking drastic action like a ban on exports (which it eventually did) for fear of angering the farmers.

Both the agriculture ministry and the department of consumer affairs do a monthly stocktaking of production and prices respectively. But the reports do not convey a sense of alarm. The agriculture ministry’s October report said the Kharif onion area was 7 percent less. It said there was “heavy damage” due to rains in September and October. It acknowledged that Madhya Pradesh had reported 58 percent damage, Karnataka 18 percent and Andhra 2 percent.

There was no figure put on the damage in Maharashtra, which is the largest producer. But it admitted that the harvest had been delayed due to continuous rains. Arrivals at mandis across the country in September were 124,000 tonnes less than in the year-ago month and in October, 294,000 tonnes less than in October 2018.

If 7 percent less area resulted in a 26 percent reduction in the harvest, the damage caused by rains would have been indeed severe.

A buffer stock of 77,373 tonnes of onions was created from the middle of the year. Of this, 27,375 tonnes were sold in the retail market at a discount to cool prices which had risen from Rs 21 a kg from July onwards. Another 11,408 tonnes of low-quality onion was disposed of in the local market the government told the Lok Sabha (presumably at distress prices).

The report of the department of consumer affairs says more than 36,000 tonnes became inedible and was discarded. It is hard to store onions for long because of their high water content.

On the government’s directive, MMTC invited bids for import of 2,000 tonnes in September but got no response. In 2015, it had imported 2,000 tonnes from Egypt and China at a landed cost of Rs 45 a kg but had to dispose of it at a third of the price, as there were no takers for the large onions that lack pungency.

India produces a quarter of the world’s onions. It is a major exporter too. At the end of September, it banned exports. In Bangladesh the price rose to 120 taka a kg, about double the price before the India ban, Reuters reported. In Sri Lanka, the price went up by 50 percent to 280 Sri Lankan rupees, the wire service informed. Bangladesh Prime Minister Sheikh Hasina said she had told her cook to stop using onions. Sitharaman has an august company.