Onion prices in India have skyrocketed by 30-50% in the past two weeks. This surge comes just ahead of the Eid al-Adha festival on June 17, traditionally a time for increased demand for the vegetable.
The price hike is the result of an imbalance between supply and demand. The current onions in the market come from farmer and trader inventories, post-rabi harvest (rabi season: Oct-Mar).
Farmers are reportedly holding back on selling their stock, anticipating even higher prices due to a decline in the 2023-24 rabi onion crop.
At the Lasalgaon mandi, a major wholesale market in Nashik, the average price per kilogram of onions jumped from Rs 17 on May 25 to Rs 26 on Monday, June 10. This is a straight increase of 53%.
Traders are also stockpiling onions, hoping the government will relax its interventions at controlling rising prices. These interventions may include measures to increase supply or dampen market speculation.
While onion exports are currently sluggish due to a 40% government-imposed duty, traders anticipate strong domestic demand for the upcoming Eid al-Adha festival.
