The price of onions in India has risen sharply. The price has more than doubled in a month. The cause is abundant rain and several key growing areas, up to 268% of what normally falls in September.
After record prices for cooking oil and sugar, among other things, Indian consumers are now faced with expensive onions. And that is an essential ingredient for many dishes in the local kitchen, reports Reuters news agency. The rain is affecting the yield of summer onions and causing delays in sowing the onions for the winter harvest. "Too much rain in September has led to high disease pressure and disappointing growth," Samadhan Bagul, a farmer in Dhule province, told Reuters. He estimates the yield this season to be 80% lower than normal.
Due to the limited supply of onions, the wholesale price for onions has doubled to 33.400 Indian rupees (approximately €383) per tonne. Local traders do not expect prices to drop significantly before mid-January. Only then will the new harvest come onto the market.
Attendance measures
In the meantime, for example, the government is trying to curb food price increases with tax measures. Onions are a politically sensitive commodity in the Asian country. Extreme price spikes have contributed to the fall of a government more than once in the past. Traders therefore expect the government to introduce export restrictions for a number of months to restore calm to the domestic market. This also happened in 2019 and 2020.
India is the world's largest onion exporter. The high prices and possible export restrictions therefore have consequences for important customers such as Bangladesh, Nepal, Malaysia and Sri Lanka. According to Ajit Shah, chairman of the association of onion exporters, several export markets have already switched to onions from other countries that can supply cheaper. This is also somewhat visible in the Dutch export figures. Sri Lanka imported 38 tons of onions up to and including week 695, compared to 520 tons in the previous year. For Malaysia the counter stands at 7.350 tons, which is almost 2.900 tons more than last season. But still below the 8.089 tons exported in the 2019/2020 season.