CHENNAI: For the first time in eight years, retail prices of onions in the city have breached the Rs 120 per kg mark, leaving consumers in shock.
Wholesale dealers in Koyembedu are struggling to keep up with the fluctuating prices due to the dearth of ready cash.
For the past three months, onion prices at both wholesale and retail levels have been skyrocketing with one kilo costing anywhere between Rs 80 to Rs 100. Traders said that floods in main onion producing states like Maharastra and Karnataka had cut off connectivity creating a high demand for the vegetable.
Members from traders organisations said that onions prices would remain on the higher end for the next 15 days until fresh crops arrive.
Abdul Khader, secretary of Koyambedu Vegetable Wholesale Merchants Association, said the price of onion has breached Rs 120 in the retail market while the wholesale price of a few variety of onions have
crossed Rs 100. "Eight years ago, we witnessed a surge in prices when a kilo was sold for around Rs 100. But we have never seen the price go up like this," Khader said.
He added that the price of Nashik (Maharashtra) Onions has touched Rs 100 to Rs 120 while that of Bangalore onions is also hovering around Rs 100. Consumers are now rooting for Rs 80 per kg Andhra Onion which are considered to be low in grade due to its shelf life. But traders warn that the prices of all varieties could also go past Rs 100 depending on the availability of the crop.
Bhaskar, an onion trader, said that the price on Monday reached a new high with onions from Nasik, which has a long shelf life, breaching Rs 5000 per sack (50kg).
The escalating prices of the crop have put enormous pressure on onion traders as suppliers are seeking immediate credit from the traders. "Usually a small time wholesale dealer would be buying 20 to
30 sacks of onions, which was earlier selling at Rs 3,000 per sack a couple of month ago. Later he sells it to retailers in bulk. However, with the surge in prices, the cost of procuring onions also have shot
up," said Bhaskar.
"Now for buying 30 sacks of onions, I have to shell out Rs 1.5 lakh. This puts us in a difficult position as we run short of cash. Even the suppliers are now asking us to pay 50 per cent of the credit immediately.
This all depends on the payment from the retailers, who at times don’t pay up immediately," says Bhaskar.
S Chandran, Market management Committee Licensed Merchants Association President said that the Koyambedu market is receiving only 75 per cent of onion supplies. “Many hotels are dependent on these low grade onions. And prices have gone up as many hotels are stocking up onions in panic,” says Chandran.
Meanwhile, the price of small onions have also breached Rs 100 mark in the wholesale trade. Khader says that in the retail market the small onion is priced at Rs 130 to Rs 170 per kilogram. “Soon we have to
keep onions in the Jewel box,” Chandran quipped.