Onions are here to make you cry again

Just like most years, onion traders are stocking up onions and helping the prices to shoot up during the monsoon. Although, in 2013 the onion prices sky rocketed unimaginably high, the central government’s adequate measures were able to keep the prices in check last year. It has almost become customary for onion prices to shoot up during the monsoon and remain abnormally high till late autumn.

Although retail prices have remained stable so far, a Mumbai-based exporter said traders in Maharashtra are stocking up heavily, anticipating a strike against market reforms likely to be initiated by the state government, as per a news report by The Economic Times.

"Other factors like increase in demand and decline in arrivals are also at play, but to a smaller extent," an exporter told the ET, requesting anonymity.

When wholesale onion prices have shot up by 50% in July over June, retail prices had touched a record high of Rs 100 per kg two years ago. In 2014, prices zoomed 35% in July over June but the government managed to suppress the price rise the next month through a series of measures.

"The traders are aware that no one can take any action against them as it is not possible to check stocks. The government is also not taking any action on the export front. It takes at least a month for the cargo to reach India after finalising the contract," the exporter told the financial daily.

Nothing unusual has happened to justify the 33% surge in onion prices in the past week, said one of the leading exporters in the country. "Some trader had some good demand, somewhere there was talk of traders going on strike, the rains haven't been so good so far and all this supported by some decline in arrival of onions," he said.
"Traders have become aggressive, jacking up the prices every day without any specific trigger. They have stocked up onions at high prices. To make money, they have to take the prices up," a functionary of Lasalgaon Agricultural Produce Marketing Committee (APMC) told the ET.

The commission agents (adtiyas) operating at the APMCs currently charge their commission from farmers. A state government appointed committee has been deliberating about charging the commission from forward traders and not from farmers. However, the committee's meeting, planned for July 24, was postponed, confirms the ET report.

With less rainfall this year in the onion growing regions, farmers have also started holding on to the crop. Most of them have either lost the kharif crop or will have to bear losses due to stunted growth in the past one month.

Also read: The Route of an Onion Shows Why India Needs Walmart, Carrefour, And Tesco

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