Onion prices are trending upwards due to increased demand from the domestic and global markets. The market is expecting a higher crop yield this year and this will result in an increase in the demand for onions. Moreover, there is a possibility of a trade war between the US and China that may also lead to an increase in the onion prices. However, due to the rampant inflation in many countries, the price of onions is not likely to remain stable for a long period.
Sowing Season: July – August
Harvesting Period: October – December
Crop Season: Kharif
Sowing Season: October – November
Harvesting Period: January – March
Crop Season: Late Kharif
Sowing Season: December – January
Harvesting Period: March-May
Crop Season: Rabi
Key Growing Regions
- Madhya Pradesh
- Andhra Pradesh
- Tamil Nadu
- West Bengal
Production Trend And Stock Position
- On average, India consumes around 13 lakh tonnes of onion every month. The crop is harvested in three seasons mainly: Kharif, late Kharif, and Rabi to meet the onion demand. This makes onions available to India most of the year.
- Andhra Pradesh, Karnataka, and Maharashtra are central Kharif onion-producing states, contributing over 75% of total Kharif onion production.
- In general, Crisil expects the production of onion to increase by 3% on year. Though the onion crop from Maharashtra is expected to arrive late, better yields, additional acreage, buffer stocks, and the anticipated export restrictions are expected to result in a marginal decline in prices.
- It is to be noted that the online bulb’s price dynamics and supply are dominated chiefly by climatic conditions, mainly in the southwest monsoon. While rabi onion provides 70% of the total production, the Kharif crop plays a crucial role in maintaining the supply during the lean period of September to November.
Monsoon Update – Changes in Onion Price
- Onion prices may increase due to erratic monsoons in India, according to Crisil. For example, the expense of the said vegetable has already gone up by INR 750 per quintal in September 2021. However, the bulb’s supply and price dynamics are heavily dominated by climatic conditions, primarily the southwest monsoon.
- As per Crisil, onion prices can be expected to cross Rs.30 per kg for Kharif 2021 due to the challenges faced in the transplantation of the crop in Maharashtra. Though, this will be somewhat lower on-year (1 to 5%) on a high base of Kharif 2020. Crisil Research says an increase of more than 100% in onion prices has occurred this year compared to 2018.
Why Has The Price Of Onion Increased Suddenly?
Crisil stated that the natural calamities had increased the moisture level in the stored rabi crop, hence shortening its shelf life. This might prepone the arrival of stored rabi crops before the lean season, which will add to the supply woes.
According to Crisil, in the corresponding festive season the previous year, prices had doubled compared to the year 2018, primarily due to supply disruption caused due to the heavy and erratic monsoon season that damaged the Kharif crop in Karnataka, Andhra Pradesh, and Maharashtra.
Crisil said that the monsoon remains to be the key monitorable. If untimely rains lash the leading producer states in October and September, the crop could bring more tears with reduced supplies and price inflation.
Check out the price forecast for Cotton.