Real-time price trackers will limit frequent onion price hikes, says economist

Mumbai: You don’t have to sniffle before adding onions to your cuisine due to the outrageous prices. Onion prices have softened marginally over the last week, reacting to the fire fighting measures of the government to augment supplies through imports as a stop-gap solution.[caption id=“attachment_2404856” align=“alignleft” width=“380”]  Expensive commodity. Reuters[/caption] “I don’t foresee any major spike in onion prices this year. However, the periodic spikes have now become an annual event despite India’s onion production rising consistently, after it hit rock bottom in 2008-09. It is strange that although grown thrice a year, retail prices continue to shock consumers every now and then,” says Depobam Chaudhuri, chief economist, ZyFin Research. Onion import can only be a stop-gap temporary work-around, but not a long-term solution. He suggests a major overhaul of the entire agricultural produce supply chain, which is the need of the hour. “A lot of the onion produce is wasted post production due to the absence of proper storage and transport facilities. Also, there is a need to reduce the information asymmetry prevailing within Indian agriculture. We need a better data reporting system and online real-time price trackers within _mandi_s to limit the influence of middle men and speculators. Unless these basic measures are implemented, no matter how high our produce is, the farmers would continue to get a poor share of the pie while end-consumers continue to face such price shocks derailing their share of wallet plans,” says Chaudhuri. Given below is Onion Price Sentiment Index and overall Consumer Outlook Index. These indices are arrived by polling 3,000 Indian urban consumers across 11 cities every month. The Price Sentiment Index is a barometer of what Indian consumers’ sentiment regarding prevailing and expected onion prices. A higher score suggests a larger number of consumers are feeling better regarding onion prices and vice versa. A score of 50 or more suggests consumers are optimistic at the prevailing and expected price levels. [caption id=“attachment_2414660” align=“alignnone” width=“373”]  Onion Price Sentiment Index. Courtesy: ZyFin Research[/caption]