Hyderabad: Onion prices in Hyderabad have surged by 25-40 percent in just a fortnight, driven by reduced arrivals and heightened demand ahead of Bakrid on June 17.
This spike comes amidst a production shortfall exacerbated by drought-like conditions in Maharashtra, the country’s leading onion-producing state.
Coupled with slower government procurement to maintain a buffer stock, this has resulted in a sharp rise in onion prices over the past month.
In Hyderabad, the retail price of onions has increased by approximately 25%, while the wholesale price has risen by 15%. A year ago, retail prices were around Rs 20 per kilogram, and wholesale prices were at Rs 1,581.97 per quintal. Currently, retail prices range between Rs 40 and Rs 50 per kilogram, compared to ₹20 to Rs 30 just a month ago.
Despite sluggish export rates caused by a 40 percent export duty, traders report strong domestic demand for onions in preparation for Bakrid in Hyderabad.
Market analysts predict that prices could exceed Rs 50 to Rs 60 per kilogram as the new kharif crop is not expected to arrive until September or October. The limited procurement by government agencies this year has encouraged traders and farmers to hold onto their stock, anticipating higher prices later.
“Reduced government procurement has led traders and farmers to stockpile onions, intending to sell them when prices peak,” said Jameel Ahmed, a Hyderabad-based onion trader.
The government’s procurement price is set around Rs 21 per kilogram, whereas the wholesale market price is between Rs 25 and Rs 30 per kilogram. This discrepancy has motivated farmers to withhold their stock for better prices.
Maharashtra, which produces over 42% of the country’s onions, has experienced a 15-20% reduction in production due to severe drought conditions. Data indicates that 27 districts in Maharashtra faced deficient rainfall ranging from -20% to -45%.
Additionally, the state endured severe heatwaves in May and June, with temperatures soaring between 44°C and 48°C over Central India, impacting the onion-growing regions. This prolonged heatwave not only reduced production but also affected the quality of stored onions.
With Hyderabad and other metro cities feeling the impact, the call for increased government intervention grows louder as stakeholders seek measures to stabilize prices and ensure adequate supply in the coming months.
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