Onion prices set to soar again as supplies tighten

Onion prices are set to soar again as supplies from Andhra Pradesh and Karnataka dry up, leaving Maharashtra the main supplier of the commodity. Onion prices in the main wholesale market in Lasalgaon are reported to have shot up to Rs2,300 per quintal on tight supplies.

Traders in Maharashtra have now started hoarding onions even as demand has picked up due to the supply shortfall, thereby pushing up prices further.

At Lasalgaon, the country's largest wholesale market for onions, prices of the vegetable, touch a high of Rs2,300 per quintal, almost doubling over the past two days and more than quadrupling since early July, when prices hovered around Rs500 per quintal.

While deficient rains put a freeze on supplies from Andhra Pradesh and Karnataka, excess rainfall in Rajasthan and Gujarat has reduced supplies from there, adding to the supply shortfall, say traders.

Prices across the country are expected to flare up as Maharashtra will remain the prime supplier for the next couple of months.

Reports say onion planting in Central Karnataka districts has been hit by poor rains and the declining water table as the region has been hit by consecutive droughts. Supplies from the area are expected to dwindle to a mere 25-30 per cent of the crop, and supplies are expected later this month.

Supplies of new crop from Kurnool region in Andhra are also down due to weak rains.

Traders are reported to be looking at importing onion from countries such as Egypt.