Pune: Onion Prices Surge Despite Export Tax and Minimum Price Imposition

Pune, 1st November 2023: Despite a 40 per cent tax on onion exports and a minimum export price of $800 per tonne (roughly Rs 66,650.68), onion prices in India continue to rise. Quality onions are fetching farmers Rs 55 to 60 per kilogram, and the upward trend in prices is anticipated to persist throughout November and December.

Harvesting of late-planted onions is set to commence at the end of December, and it is expected to contribute to market saturation, leading to a decline in prices. The current spike in prices is attributed to a reduction in onion production due to adverse weather conditions.

Unseasonal rain, hailstorms, and heatstroke have damaged onions from the previous summer season, causing them to last for only about three and a half months. Consequently, there is a shortage of onions in the market.

The price per kilogram of quality onions varies across regions, with prices ranging from Rs. 39 to Rs. 70 in different locations. Farmers typically receive between Rs. 30 and Rs. 60 per kilogram, depending on onion quality, from market committees. By the time these onions reach the retail market, the price can escalate to Rs. 50 to 80 per kilogram, accounting for transportation costs, market committee taxes, wholesale and retail trader profits.

Moderation in onion prices is expected in January with the arrival of low-quality onions. Farmers are projected to receive Rs. 55 to 70 per onion.

Vilas Bhujbal, former president of the Adte Association of Pune Market Committee, has indicated that high prices are likely to persist throughout November and December.