Onion Prices Could Follow Tomato's Path, Might Touch Rs 60/70 per kg by Month End

A recent research study conducted by Crisil has raised concerns about the potential trajectory of onion prices, drawing parallels to the volatile tomato market. According to the report released on Friday, the shelf life of rabi onions has been curtailed by one to two months due to panic selling in February and March of 2023. As a consequence, stocks from the previous rabi season could dwindle significantly by the end of August, rather than the usual timeline of September.

The implications of this shortened shelf life could lead to an extension of the current lean season by 15 to 20 days, ultimately tightening supplies and exerting upward pressure on prices, the study highlights.

The Crisil report suggests that during this extended lean period, onion prices could surge significantly, potentially reaching around Rs 60-70 per kg. At present, the retail price of onions in Delhi markets is approximately Rs 30 per kg, as reported by the Department of Consumer Affairs. If the predictions in Crisil's report hold true, consumers might witness a doubling of prices by the end of the month.

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Despite these unsettling projections, the research also offered a glimmer of hope. It noted that even in the event of a price surge, the anticipated rates would remain below the high prices experienced in 2020. Furthermore, the report indicated that the market could expect a downturn once the kharif crop starts arriving in October, offering some respite to consumers.

However, the report underscored the pivotal role that August and September rainfall would play in determining the transplantation and bulb development of the kharif onion crop. Unpredictable weather during these months could exacerbate the situation and influence market dynamics.

The research concluded with a cautious observation, stating that price fluctuations during the festive months of October to December are anticipated to stabilize in comparison to the potentially high prices seen in September. This suggests that consumers might find a more stable pricing environment during the festive season.

As stakeholders, from farmers to consumers, keep a close watch on the evolving onion market dynamics, the Crisil research serves as a reminder of the interconnectedness of agricultural factors and market behaviours.

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