“A government that cannot control prices does not have to govern.” This was the motto that finally dethroned the Janata Party. It was the year 1980. The Janata Party ruled in the Center and Congress opposed it. Onion prices skyrocketed. Indira Gandhi campaigned across the country for parliamentary elections with a garland of onions around her neck and asked people to vote on the motto.
This was the first time that onion prices became a major electoral issue. The Janata Party lost the polls and once again Congress formed a government in the Center. After that, there came many occasions when the onions became leaders in the saddle with watery eyes.
It was 1998 and once again onion prices were skyrocketing. The BJP had to bring in three senior ministers, but could not save itself from the wrath of the onion. Madan Lal Khurana, Sahib Singh Verma and then Sushma Swaraj were appointed CM of Delhi one by one, but the price of onion could not be controlled and the party lost Delhi when the assembly elections were held.
The then Prime Minister of Rajasthan, Bhairon Singh Shekhawat, once said after losing the election that the onion was behind his defeat. Now, the third most populous state in India, Bihar, is going to vote and the price of onions is heading north. The question that many are asking is, will this influence the results of the surveys?
In most of the region, the retail price for onions ranges from ₹ 70-100. According to experts, the price may soon reach ₹ 120-150 per kilo. Until a week ago, the rates were around Rs 30-40 per kg. But suddenly one day, the wholesale price of onion increased by Rs 2,000 per quintal, prompting an increase in retail rates.
Last Monday, the onion rate at the country’s largest wholesale market in Lasalgaon, Nasik, peaked at $ 7,100 per quintal. Any increase in the fee at Lasalgaon mandi leads to an increase in retail prices across the country.
Why did onion prices increase?
The price of any item increases only when its production is lower or the demand is high. In the case of onion, both things happened.
To understand the increase in onion prices, we will first have to understand which are the areas where onions are grown. According to the Directorate for Onion and Garlic Research, Maharashtra is the largest producer of kitchen staples. Nasik, Ahmednagar, Pune, Dhule and Sholapur in Maharashtra are the largest onion producers in the country. It is followed by Karnataka, Gujarat, Bihar, Madhya Pradesh and Andhra Pradesh, where onions are produced in large quantities.
Of these, onion crops on thousands of acres in Maharashtra, Karnataka and Andhra Pradesh were destroyed due to heavy rains. The Maharashtra region where onions are mainly grown received heavy rains in September, which was very rare. Andhra Pradesh and Telangana received record rains in October in about 100 years. Many areas of Karnataka are even now facing a flood-like situation.
Due to continued rains and floods, the onion crop in many states has been destroyed. As if this were not enough, the rise in onion prices has also led to its hoarding.
Increased demand
During the closure, hotels, restaurants and dhabas were closed throughout the country and because of this the demand for onions fell and so did the price. After unlock 5, restaurants have opened and this has caused a sudden increase in demand.
Heavy rains in many areas have not only affected the onion harvest but also the supply. The demand for onion is more than before in the market, which has caused an increase in its rate.
Where are the prices heading?
According to people familiar with the onion business, the rate can reach ₹ 120 per kilo because excessive rains have affected its production in the main producing states. The new onion crop will hit the market only in February next year. At present, the wholesale price of onion has touched ₹ 7,000 a quintal in the largest mandi in the country and its retail price in different parts of the country is expected to see an increase of ₹ 30-40. And on this basis, experts say that the price of onions can touch ₹ 120 per kilo.
Now let’s understand what the onion situation is in different parts of the country.
Kerala
A week ago, onion was selling at a rate of ₹ 20-25 per kilo, but now it has reached ₹ 75-90 per kilo. The small onion, called shallot, sells for ₹ 100, which was previously priced at ₹ 70-85.
Andhra Pradesh and Telangana
The onion crop was destroyed due to heavy rains in Andhra and Telangana and this has also affected the supply chain. Because of this, traders have increased the price of onion. Currently, onion is retailed at ₹ 100 per kilo, while its wholesale price is ₹ 70 to ₹ 85 per kilo.
The Andhra Pradesh government plans to sell 1,000 tonnes of onion at reduced prices through Rythu Bazars. During the monsoon season, the onion growing area was 15,000 acres in Andhra, while in Telangana it was 5,500 acres. But the production was not as good as expected.
Tamil nadu
The onion is sold at a rate of ₹ 100 per kilo on the retail market. Tamil Nadu is selling onions at a reduced price of Rs 45 per kilo through Amma Farm Fresh. To make enough onion available in the state, the government has placed orders in Egypt and Iran. It is the second year in a row that the state has purchased onions from Egypt.
Maharashtra
Besides Nasik in Maharashtra, Dhule, Pune, Satara, Solapur are also very famous for growing onions. But all of these areas have received more rain than normal this year, which has affected production.
In Lasalgaon mandi, the price of onion was $ 7,100 per quintal earlier this week. This onion price has been the highest in the last year and the retail rate could soon cross ₹ 100 per kilo. Currently the price is ₹ 80 per kilo.
Experts say that this year the onions will bring more tears to the eyes of consumers and the record price phase may last longer. Excess rainfall in the production area is assumed to be the main culprit. Prices are not expected to drop before the mandi starts to get a new crop in February next year.
Karnataka
After Maharashtra, Karnataka is the largest onion producer in the country. Due to heavy rains, the total harvest in the northern part of the state has been destroyed. In Bagalkot alone, the 90,000 acre crop has been ruined. According to officials, the onion harvest on 2 lakh acres in the state has been affected due to the rain. On the retail market, onion sells for between ₹ 80 and ₹ 100 per kilo.
Bihar and Jharkhand
Bihar and Jharkhand source their share of onion from Madhya Pradesh. In Madhya Pradesh mandi, the wholesale rate for onion is Rs 5,500 to 6,000 per quintal. Because of this, the retail price in both states is around ₹ 60-70 per kilo. With the assembly elections approaching in Bihar, if onion prices continue to rise in the state, this may become a major problem in polls. In previous elections, when Lalu Yadav was out of jail, he had turned rising prices for pulses and onions into an electoral agenda.
Other parts of the country
In Odisha, the onion rate in September was ₹ 30-35 per kilo, which has now risen to ₹ 70-75 per kilo. The president of the Odisha Traders Association Sudhakar Panda said that currently the wholesale rate for onions in mandi is Rs 6,500 per quintal. In Assam, onions are sold at the rate of ₹ 60-70 per kilo.
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