Onion prices in Maharashtra have dropped by 21 percent over the past month. The average wholesale price, which was between Rs 3000 to Rs 3200 per quintal in July, has dropped to Rs 2300 to Rs 2500 per quintal in August. This decline is attributed to reduced demand for Indian onions in the international market and a 40 percent export duty. Despite the wholesale price drop, retail prices have surged by 10 percent, now hovering around Rs 50 per kg. Farmers, however, are not benefiting from this increase.
Anil Ghanwat, leader of Maharashtra's farmers' organization Shetkari Sanghatana and a member of the Supreme Court-formed committee on MSP, told Rural Voice that onion prices in Maharashtra have notably decreased over the last month. He noted that the average price in Nashik's onion market had peaked at Rs 3500 per quintal in July but has now fallen to Rs 2300 to Rs 2500 per quintal. Initially, there was optimism for better prices after the central government lifted the export ban, but prices are now declining again, even as market rates remain high.
International Market Demand Decreases
Ghanwat explained that although the export ban has been lifted, the imposition of a 40 percent export duty and a minimum export price of $500 per tonne continues to burden farmers. The export restrictions have led to significant losses, and the current policies continue to impact onion exports negatively. The arrival of cheaper onions from Pakistan in the international market has further reduced the demand for Indian onions. With abundant supply but dwindling demand, Indian onions, burdened by export duties, are sold at higher prices compared to the more affordable Pakistani onions.
Farmers' Profits Dwindle
Bharat Dighole, President of the Maharashtra State Onion Producers Association, told Rural Voice that the current low prices mean farmers are not seeing adequate profits. A month ago, farmers were receiving between Rs 30 to Rs 35 per kg for their onions, but now prices have dropped to Rs 23 to Rs 25 per kg, barely covering the production cost of around Rs 20 per kg. This leaves farmers with a meager profit margin of only Rs 3 to Rs 4 per kg.
Dighole added that while market prices for onions remain high, farmers are getting only half of that amount. According to the Union Ministry of Consumer Affairs, Food and Public Distribution's Price Monitoring Division, the average retail price of onions across the country is Rs 43.14 per kg, compared to Rs 41.92 per kg a month ago. Yet, onions are being sold in the market for around Rs 50 per kg.
Overall, the sharp drop in wholesale onion prices has not translated to relief in the retail market. At the same time, farmers continue to suffer losses due to declining international demand and export duties.