India faces onion crisis, wholesale price touches Rs 50 per kg, failed Monsoon may push prices further up

New Delhi: The ruling Bharatiya Janata Party (BJP) at the Centre is facing yet another onion crisis. The wholesale onion price has touched Rs 4900 per quintal (100 Kilo) in India’s largest onion market Lasalgaon in Maharashtra.

On a single day the price has gone up by Rs 400 per quintal. Since the wholesale price is almost Rs 50 per 1 kilogram, the retail price of onion may even cross Rs 65-70 per kilogram in many parts of India.

Most part of North India gets onion from Lasalgaon market. The other major onion growing state is Karnataka. Like Maharashtra, Karnataka is also facing a drought due to failed Monsoon.

Besides these two states, Onion is grown in Gujarat, Uttar Pradesh, Tamil Nadu, Andhra Pradesh and West Bengal.

The onion which was sold at Rs 20 per kilogram has suddenly become costlier in the last two weeks. The onion is already being sold for Rs 50-60 per kilogram in many parts of India. In Bengaluru, one of the largest onion markets in India, the prices have already touched Rs 5000 per quintal.

Worried by the skyrocketing price of onion, the Union government has decided to import 10,000 metric tonnes of onions from abroad. The PSU MMTC has been asked to float a global tender to import 10,000 tonnes. It is likely to import onion from Pakistan and China.

Reasons for Price Rise

The price of onion is at 2 year high in Lasalgaon market. National Horticultural Foundation says there’s a fall in supply as harvesting has been delayed in Gujarat Rajasthan and MP. It says deficient rainfall could lower Kharif output in Maharashtra, Karnataka, AP, the three major onion growing states in India. Stored Rabi crop has halved from 28 lakh tonnes in July to 14 lakh tonnes now

In the last two years, onion prices have crossed Rs 50 per kilogram at least four times. The Delhi government is selling onions through government run shops to help the consumers. But, it is nothing compared to the huge demand for the onion.

Failed Monsoon

Only a few parts of India have received excess or normal Monsoon in 2015. Most other parts have received less than normal Monsoon this time. The distribution of the Monsoon has also been uneven in major states like Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh, Madhya Pradesh, Uttar Pradesh, Haryana and Punjab.