- Unseasonal rains and hailstorms damaged Maharashtra's onion crops this year
- Late monsoons delayed Kharif onion sowing, affecting supply from Sept-Nov
- Wholesale prices surged due to supply issues and increased festive demand
According to data from Consumer Affairs Ministry, the all-India average retail price of onions surged 59% on a year-on-year basis, with the Centre announcing the 'Kanda Express' initiative on Tuesday to ease consumers' difficulties due to the price rise.
The special Kanda Express freight trains will move onion stocks from Nashik to major cities facing supply pressures as per the Food and Consumer Affairs Ministry.
ALSO READ: First 'Kanda Express' To Reach Delhi On Wednesday With 800 Tonnes Of Onions At Rs 35/Kg
The price of onions went up to Rs 43.53/kg on Aug. 24, from Rs 27.37/kg in the same period from the previous year. The average wholesale price shot up by 68% to Rs 35.58/kg, compared to Rs 21.23/kg in the preceding year.
Major cities saw a sharper price hike on Monday, with the bulb retailing for Rs 65 a kilo in Delhi from Rs 35 in the year-ago period, and Chennai seeing it priced at Rs 58 per kg compared to Rs 33 in the year prior.
Three Key Factors Affecting The Cost Of Onions
Adverse Rain And Hailstorms
The Rabi onion crop is harvested during March and April and stored in supply silos being retailed via markets across the country until October. The onion stocks were adversely affected when Mahrashtra, the largest onion producing state, witnessed unseasonal rains and hailstorms during those aforementioned months, damaging crops and affecting their supply. As supply declines, demand rises for a product, along with its price.
Late Monsoons Disrupt Cropping Patterns
Late monsoons further disrupted cropping patterns of the Kharif onion crops which will be harvested from September to November. Farmers had to delay sowing them due to the monsoon arriving late which will likely exacerbate the supply issue.
ALSO READ: Onion Price Spike: Special Trains To Ferry Fresh Stocks From Nashik To Cool Rates
Wholesale Price Rise And Festive Demand
The wholesale prices of onions also surged due to the aforementioned supply disruptions caused by irregular weather patterns. The centre increased the procurement price of onions to Rs 26.45 per kg from Rs 12.70 per kg in May owing to these factors. According to Agrospectrum India, the wholesale price of the vegetable increased by 32% from the previous week, 43% from last month and 119% from the preceding year.
These costs have then been passed on to consumers via retail price hikes. Festive demand has also spurred wholesalers to ramp up their inventory expansion of onions, leading to further impact on prices.
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