After steady rise, onion prices dip sharply

After recording a steady rise, onion prices have started to dip sharply in India, with prices at the wholesale market of Lasalgaon in Nashik dropping by Rs 1,000 per quintal in one day.

Farmers and markets sources blamed 'unnecessary interference' by the government for the sudden dip in prices, reports The Indian Express.

Over the last few days, wholesale markets across Maharastra had reported a steady rise in onion prices. At Lasalgaon's market in Niphad taluka of Nashik district, average traded prices had crossed Rs 4,000 a quintal around 10 days ago. In most cities across India, the bulb is retailing at around Rs 60-70 a kg. With Maharashtra and Haryana going to polls next month, the steep rise in onion prices became a cause for concern.

When markets opened for auction on Thursday, prices tumbled, and the average prices after the day's trading stood at Rs 3,000 a quintal.

Jaydutt Holkar, chairman of Lasalgaon market, blamed unnecessary government intervention for the fall in prices. He pointed out how the government had first floated tenders to import onion and then went on to stop exports by imposing a steep Minimum Export Price (MEP) of $850 per tonne.

"If this was not enough, there was indirect pressure on the market to reduce prices. The combination of all this has worked and prices have collapsed," he said.

Markets have indicated that the price rise was due to shortage of onion following a dip in sowing of summer onions in Maharashtra and late arrival of kharif onions from Karnataka.

Last week, a team of senior officials from the Department of Consumer Affairs and Ministry of Agriculture visited Nashik and Pune to assess the situation. While speaking to The Indian Express, the members had indicated that they felt the price rise was mostly due to speculation by traders.