What Caused the Onion Prices to Crash?

The principal reason for the recent decline in prices is an abrupt increase in temperatures that started around the second week of February.

• Onions that have a high moisture content are vulnerable to heat shock quality degradation, leading to bulb shrinkage due to sudden drying.
• Typically, farmers would have only sold the Kharif crop at this time of the year.
• However, this year's extreme heat has compelled them to sell even the late-kharif onions, which are not suitable for storage.
• As a result, the prices have fallen due to the simultaneous arrival of both Kharif and late-kharif onions in the market.

About Onion Cultivation

• Farmers predominantly grow three crops: Kharif (planted in June-July and harvested in September-October), Late-kharif (planted in September-October and harvested in January-February), and Rabi (planted in December-January and harvested in March-April).
• It's not common for farmers to market their harvest all at once. They usually sell in batches to avoid a price collapse due to an influx of arrivals.
• The Kharif onions are sold until February, and the late-kharif onions until May-June. Both these onion varieties have a high moisture content and can be stored for up to four months.
• In contrast, Rabi onions, grown during the winter-spring months, have a lower moisture content and can be stored for at least six months. These onions cater to the market during the summer and monsoon months, up until October.

Are there any other factors contributing to the price drop?

• Maharashtra contributes to nearly 40% of India's annual onion production of 25-26 million tonnes, with 1.5-1.6 million tonnes being exported.
• Other significant onion-producing states include Madhya Pradesh (16-17%), Karnataka (9-10%), Gujarat (6-7%), Rajasthan (5-6%), and Bihar (5-6%).
• This year's abundant monsoon rains have led to an increased water availability, encouraging farmers in Madhya Pradesh, Rajasthan, Karnataka, and Gujarat to expand their onion cultivation areas.
• The combined effect of an increased supply of onions from these states and the forced sale of late-kharif crops has led to a sharp drop in prices.

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