Even new onion crop unlikely to trigger significant price correction

Even new onion crop unlikely to trigger significant price correctionNew crop of onions has started arriving markets but prices are not expected to significantly come down in the near future.

Heavy rainfall in key onion-producing states has not only delayed harvesting but also hit the quality of bulbs. Farmers from Andhra Pradesh, Maharashtra, Karnataka and Odisha are reporting lower output.

Vilas Bhujbal, a Pune-based trader, said, "Supply from the summer-sown crop has started, but it is nearly half compared to last year. Rains have hurt the development of bulbs; their size is smaller than usual. Farmers are reporting lower yields."

While RP Gupta, director of the National Horticultural Research & Development Foundation (NHRDF), said the arrival of new yield of onions would improve the situation from next week, traders believe supplies would not be sufficient to bring prices significantly down.

Onion retail prices have quadrupled over the past three months to more than Rs 80 a kg.

Indians, on average, consume nearly 15 million tones of onions every year. Onions are used in almost all Indian dishes. The past has shown that higher onion prices can even tumble governments. The states of New Delhi, Mizoram, Rajasthan, Madhya Pradesh and Chhattisgarh are all set for assembly elections, which are being seen as a warm-up for national elections slated for 2014.