Onion Prices Slip As Low As Rs 3/kg, Farmers' Losses Mount Due To COVID-19

Being an essential commodity, the transport of onions is allowed, however, the movement has been limited due to the spread of COVID-19. Market yards remain closed across the nation and export orders are fewer due to a decline in overseas demand as importing countries also face restrictions associated with the pandemic.

These restrictions have raised worries among onion farmers who have had ample output this Kharif season but are unable to sell them before they spoil, due to supply chain disruptions. It is the peak of onion harvesting season and prices offered to farmers have fallen sharply.

According to a Business Standard report on the situation in Vinchur mandi near Lasalgaon, model onion prices were quoted as low as Rs 6/kg on Monday at the Vinchur agricultural produce market committee (APMC). Price for poor quality onions slipped to Rs 3/kg, while export quality bulb was quoted at Rs 9/kg.

Lasalgoan, in Maharashtra's Nashik district, is Asia's largest spot onion selling market yard.

Total arrivals at the Vinchur mandi had jumped unusually to 2,400 tonne on Monday, the report said, twice that on normal days, as farmers from Lasalgaon, India's largest onion growing region, rushed to Vinchur to sell their produce. The benchmark Lasalgaon mandi has remained closed for days after the local administration ordered the people not to gather in market yard and maintain social distancing after a COVID-19 patient was isolated in the taluk last week.

A similar decline in prices was seen in Kurnool district, Andhra Pradesh, where the declaration of the town as a 'containment zone' resulted in strict lockdown orders disrupting the supply chain of onion farmers in the region.

Kurnool has harvested onions in 1,500 hectares of land, according to a report from The News Minute and farmers stare at possible losses due to spoilage of produce. The district has recorded the highest number of positive COVID-19 cases in Andhra Pradesh and onion prices offered to farmers in the region have fallen from Rs 4,000 per quintal to Rs 600 per quintal in three weeks time.

Reports suggest that farmers will not be able to recover even their production expenses at Rs 6/kg prices and may be forced to sell them at loss to large traders, warehouses and stockists due to lack of storage facility. "We should earn at least Rs 2,000 per quintal to sustain ourselves," a farmer from the district told The News Minute.

Around five months ago when retail onion prices had hit Rs 100 per kg due to unfavourable weather conditions, it were the large traders with stocks who were able to take advantage of the surge in rates and not the farmers. This time, farmers stare at losses despite bumper production, which may be bought by large traders once again at cheap rates to be stored and sold at a higher price when the market stabilises.