Onions Prices Bring Tears

Shortage in supply owing to bad monsoon in the North, low inventories and panic buying in the wholesale market push up prices, with retail rates almost doubling in just two weeks

Published: 30th July 2015 05:05 AM  |   Last Updated: 30th July 2015 05:05 AM   |  A+A-

Onions

CHENNAI: Nothing is as painfully disruptive to a household than the words ‘price rise’. After a few quiet months of sticking to the bottom half of the price table, it is now the turn of onions to start burning holes into wallets. The last two weeks have seen onion prices— both retail and wholesale— jump nearly two fold.

Retail prices of onions in city groceries, onions of good quality, had hit Rs 46 per kg by Wednesday morning. Less than two weeks ago, the same onions were retailing at less than Rs  25.

“Today’s prices at Koyambedu’s wholesale market are hovering around Rs 2,100 - 2,300 per 50 kg for the really good onions. For the standard stock, the asking price is at Rs  1,800 - 1,850. Even the lesser stocks of onions, the small and low quality ones, are at Rs 1,600 per 50 kg,” said Arvind Natarajan of NRC Onion Company.

The reason for the price rise is depressingly familiar, the same as quoted for a thousand other price rises — shortage in supply, low inventories and panic buying in the wholesale market. “There has been a bad Monsoon up north, stocks have been destroyed or have rotted and supply from there has reduced significantly. The stock from Karnataka is what was in their inventory and inventory levels are already low - which is why prices have become high,” said Natarajan. There is also an element of panic buying by stockists due to low inventories, say wholesalers.

oni.JPGAll these reasons put together have seen onions become dearer in value over the last two weeks. From fetching Rs 900 - Rs 1,200 on July 15 to Rs 2,300 now, onions are becoming costlier. “We don’t know yet how much and how far it will swing. Prices can both increase or decrease I have the coming days depending on what stocks are released from where,” admitted Natarajan.

All this, while informative, doesn’t help normal folk in shelling out nearly double for a commodity that is nearly a staple food source. “This is becoming a very difficult thing to handle. First it was pulses and now onions. If prices of basic foodstuffs keep going up and up every now and then, what are we to do,” complained R Savitri Kumar, a homemaker.

“At least pulses, we could substitute with other vegetables and manage without them for a while. Onions have to be used in everything and it is very difficult with prices keep going up,” she added.

The uncertainty in prices however is likely to continue for a while. Because while the government has started the process to import the 70,000 tons of the vegetable from Pakistan, Iran, Egypt and China to meet this shortage, the import is only likely to be realised a few months down the line.

“There is enough stock to last until then, but wholesalers are panicking and hence are willing to pay more for even low quality stock. Unless this demand spurt calms down or supply comes in from somewhere, prices will remain high or even go up,” said R Rajarathinam, another onion wholesaler.

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