Crashing wholesale onion prices yet to fully benefit consumers

Onion wholesale prices that since last month have plummeted 69% in Delhi and by upto 80% in Lasalgaon, the country's largest onion market, are yet to be fully passed on to consumers.

Vegetable traders bought the staple commodity in range of Rs5-20/kg on January 25, against the ruling price of Rs65 a kg around December 21.

This contrasts with onion being sold at retail outlets in Delhi at Rs40 a kg on January 25 against Rs85 per kg around December 21, a fall of 52%, traders said.

Nonetheless, the kitchen staple has become more affordable since the peak of the crisis when escalating costs of this bulb along with vegetables like tomato and garlic pushed up food inflation for the week ending Christmas, to the year's high of 18.32%.

The slide in onion prices in the wholesale markets give wing to the hopes that the crisis would end soon. New food minister KV Thomas said recently that onion prices will improve from end-January.

Wholesale price of good quality onions are expected to fall to Rs15 per kg by the end of January and Rs10 per kg in February, said Rajendra Sharma, general secretary of the onion merchants association in the Azadpur market.

Traders tell it will take a few days before the decline in wholesale prices is fully transferred to consumers.

The drop in wholesale price is significant in prominent onion markets of Lasalgaon and Pimpalgaon in Nashik, one of the major onion producing region in Maharashtra.

In Lasalgaon, onion was yesterday being sold at Rs13 per kg from Rs67/kg on December 21, a drop of 80%, according to the National Horticultural Research Development Foundation, set up by agri-cooperative Nafed, that publishes daily wholesale rates of the vegetable in prominent cities.

Similarly, onion prices softened at Pimpalgaon by 78% during the period, NHRDF added. Wholesale onion price was recorded at Rs14 per kg on January 25 as compared to Rs65/kg on December 21.