February 26, 2024

Onion costs are more likely to begin capturing up within the retail market in direction of the top of August earlier than going up additional to round ₹60-70 per kg subsequent month resulting from tightened provides, a report mentioned on August 4.

Nonetheless, the costs will stay beneath the highs of 2020, it mentioned.

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“The availability-demand imbalance is predicted to mirror in onion costs in direction of end-August. As per our floor interactions, costs are anticipated to indicate vital enhance from early September within the retail market, reaching as much as ₹60-70 per kg through the lean patch. Nonetheless, costs will stay beneath the highs of 2020,” in line with the report by Crisil Market Intelligence and Analytics.

The report acknowledged that owing to lowered shelf lifetime of rabi onion by 1-2 months and panic promoting in February-March this yr, rabi shares within the open market are anticipated to say no considerably by the top of August as an alternative of September, extending the lean season by 15-20 days, which is more likely to expose the market to tightened provides and excessive costs.

Onion provides will ease as soon as kharif arrivals begin from October, resulting in softening of costs, the report mentioned.

The value motion within the festive months (October-December) is predicted to stabilise, the report acknowledged.

Throughout the January-Might interval this yr, a fall in onion costs provided some reduction to shoppers dealing with considerably costlier cereals, pulses and different greens.

Nonetheless, this created a unfavourable sowing sentiment amongst onion farmers for the kharif season.

“Consequently, we count on acreage to say no 8% this yr, and kharif manufacturing of onion to fall 5% year-on-year. Annual manufacturing is predicted at 29 million tonnes (MMT), 7% greater than the common of the previous 5 years (2018-2022),” mentioned the report.

So, a serious provide crunch is unlikely this yr regardless of decrease kharif and rabi output. Nonetheless, rainfall in August and September will decide plantation and bulb growth of the onion crop, it added.