Why Onion Prices Are Surging, Making People Cry; The Real Reason Explained

Onion Prices Hike: Hiked Onion prices are creating news. The experts say the first signs of rising onion prices are heard in Nashik. The reason is not just the large-scale onion production in Maharashtra, but also the presence of major onion markets in the Nashik production region, along with a network of middlemen and wholesale traders, warehouses, and a supply chain that reaches markets across the country and abroad. Therefore, changes in arrivals and prices in Nashik’s markets become an indicator of rising onion prices in markets throughout the country.

The current surge in onion prices is a prime example of this. On Monday, onion prices in Delhi markets were around Rs 25 per kg, while in Nashik, prices reached Rs 42 and in Mumbai, Rs 35 per kg. However, following government initiatives, the prices began to decline in Nashik on Tuesday.

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Maharashtra Produces 60 Per Cent Of The Country's Onions

Maharashtra produces 60 per cent of the country's onion production, with Nashik accounting for approximately 90 per cent. Nashik has approximately 27 major onion markets, including Lasalgaon, which is considered one of the largest in the country.

Nashik Controls Onion Trade

Agents and traders purchase onions from farmers in major markets like Pimpalgaon Baswant, Chandwad, Devla, Yeola, Niphad, Manmad, and Umrane and then transport them to markets in other states. In Nashik, commission agents and traders own a large number of warehouses where onions are stored for months after sorting, grading, and packing.

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Due to Nashik's network and storage facilities, traders from Madhya Pradesh, Uttar Pradesh, and Karnataka also store onions there. The Mumbai port is also nearby, facilitating exports. A large portion of Karnataka's onion exports also originate from Nashik.

Why Do Onion Prices Increase Every Year?

The government also indicated in July that a group of traders in Nashik were making speculative purchases. At that time, there were no major concerns about onion availability in the country, and Maharashtra's markets were receiving more than 30,000 tons of onion daily.

In such a situation, the lack of immediate arrival of large quantities of onions in the market could put pressure on prices. As prices rise in large markets like Lasalgaon, wholesale traders from other states also increase their purchase prices.

Onions from Nashik are exported to Delhi, Bihar, Bengal, Gujarat, Assam, and South India. Therefore, prices here quickly reach other markets and impact retail prices. Nashik's importance can also be understood from the fact that the government purchases onions for its buffer stock from here.

In 2023, NAFED and NCCF purchased nearly 90 per cent of the 300,000 tons of summer onions from Maharashtra from Nashik district. This time, as prices have risen, the government is using this same network to reverse the flow. Buffer stocks are being withdrawn from Nashik and sent to other cities.

Government To Sell Onions

Consumer Affairs Secretary Nidhi Khare said that 800 tonnes of onion will reach Delhi on Wednesday through 'Kanda Express', which will be sold at a discounted rate of Rs 35 per kg. It will be retailed through NAFED, NCCF, and Central Warehouse stores. Railway racks are also sending onions to Chennai, Ernakulam, Madurai, and Guwahati. An attempt is being made to control prices in other parts of the country by withdrawing the government buffer from Nashik.