The prices of onions in the wholesale market of Maharashtra, in particular, the Pune and Nashik district crossed the Rs.2,000 per quintal mark on Tuesday amid reports of large scale crop damage in Karnataka. Speculation on the further rise has given the onion market in the state volatility leading to instability in the prices.
The increase in the prices has been attributed by wholesale sellers to the disruption in their supply chain due to heavy rain during the monsoon in late August. The rain has affected the quality of the stored crop in Maharashtra as well as Gujarat and Madhya Pradesh.
Retail markets in urban centres and nearby areas have seen a consistent rise in price as Pune, Mumbai and Delhi recorded a price appreciation from Rs.20 to Rs.30 per kg. The price in the wholesale market of Lasalgaon have followed a similar trajectory, and have been approximately Rs.2,500 per quintal, while the nearby district of Yeola marked an average of Rs.2,400 per quintal over the last week. As reported by The Indian Express, the trend has been reported in the market across Maharashtra in September and August.
The price hike trend has taken analysts by surprise as farmers reported a productive summer crop season, growing 9 lakh hectares, over the 7.50 lakh hectares in 2019. The Coronavirus pandemic had contributed to a sharp drop in prices in May due to the dip in demand amid the lockdown, severely impacting the industrial demand, especially among hospitality services like hotels and restaurants as well the processed food industry.