Not only smog, but the onion will make you cry this Diwali

Onion prices are expected to remain high throughout the Diwali season as heavy rains in key growing states damaged the crop and delayed its arrival in the market. Onions are currently selling at Rs 60-80 per kg in retail markets and due to weather extremes, prices are likely to be kept high.

Recent rains in major onion producing states like Maharashtra, Karnataka, Telangana and Andhra Pradesh have had a negative impact on the crop. These states faced heavy and prolonged rainfall, which affected the quality of onions and delayed their arrival in the markets. The result is limited supplies and higher prices.

In Maharashtra’s Lasalgaon, the largest wholesale onion market in the country, wholesale prices have been around Rs 45-50 per kg for over a month now. The government had expected prices to fall along with the kharif (monsoon) onion harvest, but heavy rain caused problems. In some areas, fields were flooded, delaying harvests by 10 to 15 days, increasing pressure on the supply chain.

Experts predict that onion prices will remain high for at least another two to three weeks. Vikash Singh, an onion exporter from Maharashtra, told The Economic Times: “The kharif onion harvest will be delayed in rainfall areas, which may keep onion prices stable for at least two to three weeks.”

In response to the situation, the government has taken steps to control onion prices. To ease the market situation a little, the company began selling onions from its buffer stocks. In addition, a special ‘kanda train’ was launched to transport onions from Nashik to Delhi, thereby reducing transport costs and increasing supplies to north India.

However, traders in southern states continue to face problems. According to Tonkini Pramod Kumar, an onion trader in Hyderabad, the quality of onions has deteriorated due to heavy rains in areas like Kurnool and other parts of Telangana and Andhra Pradesh. “The quality of onions has deteriorated significantly due to heavy rains,” he said.

Rising prices of onions, coupled with rising prices of other essential items such as tomatoes and cooking oils, have led to rising food inflation in India. Inflation hit a nine-month high in September as food prices soared. Retail inflation, which fell to a five-year low of 3.65% in August, jumped to 5.49% in September.

Food inflation, which makes up about half of the consumer price inflation (CPI) calculation, rose from 5.66% in August to 9.24% in September. Rising prices have impacted household budgets across the country, especially during the festive season.

In addition to onions, prices for vegetable oil have increased. After two months of stability, edible oil prices increased in September. This was partly due to the Indian government increasing import duties. The global market has also seen an increase in palm oil prices, which has affected the local market.