Onion prices are expected to remain elevated through the Diwali festival season, with retail markets currently selling the essential commodity at Rs 60-80 per kg. Heavy rainfall in key growing states has damaged crops and disrupted market supplies.
Onion price hike expected this Diwali
Major onion-producing states including Maharashtra, Karnataka, Telangana, and Andhra Pradesh have experienced significant rainfall, affecting both crop quality and harvest schedules. In Lasalgaon, Maharashtra’s premier wholesale onion market, prices have consistently remained at Rs 45-50 per kg for over a month.
“The harvest of the kharif onions would be delayed in the areas that have been getting rainfall, which could keep the onion prices firm for at least two to three weeks,” says Vikash Singh, a Maharashtra-based onion exporter, speaking to the media.
Is rainfall the reason behind price hike of onions?
The government’s expectations of price relief with the Kharif harvest have been dampened by widespread waterlogging in farming areas, causing harvest delays of 10-15 days. In response, authorities have initiated buffer stock sales and launched a dedicated ‘kanda train’ to transport onions from Nashik to Delhi, aiming to stabilize northern market supplies.
Southern states face particular challenges, as reported by Hyderabad trader Tonkini Pramod Kumar: “The quality of onions has been damaged considerably due to heavy rainfall” in regions including Kurnool and parts of Telangana and Andhra Pradesh.
The onion price surge contributes to broader inflationary pressures in India’s food sector. September saw retail inflation jump to 5.49% from August’s five-year low of 3.65%, while food inflation escalated from 5.66% to 9.24%. This sharp increase affects household budgets during the festive season, compounded by rising costs of other essentials like tomatoes and cooking oils.
Rates of cooking oil also expected to increase
The cooking oil market has also experienced price increases following two months of stability, influenced by both higher import duties and rising global palm oil prices.
As the festive season approaches, the combination of weather-related crop damage, delayed harvests, and broader market pressures suggests that consumers may need to adjust to higher onion prices in the short term, despite government interventions to stabilize the market.
