Onion is currently trading between Rs 70 and Rs 80 in retail markets across the country.
Farmers in Nashik district, Maharashtra - a major producer of onion - have started harvesting the premature crop to cash in on the high prices in mandis. Good-quality onion was quoted at Rs 93.50 a kg on the higher side. However, the poorest-quality onion was selling at Rs 25.50 a kg on Wednesday as against Rs 20 a kg on Tuesday. Thus, the model price of onion works out to Rs 70-75 a kg in Lasalgaon, translating into Rs 100-125 a kg in the retail markets of the country.
Despite onion prices hitting Rs 130 a kg in the wholesale market, farmers have not gained enough to make a profit this season. Farmers and other stakeholders in the value chain estimate that 30 per cent crop damage this kharif season would result in a decline of about 2 million tonnes in output from Lasalgaon district alone. Similar crop damage across the country could lead to an onion shortage of nearly 7 million tonnes this year.
With auctions unable to proceed, the median onion price declined 17 per cent or Rs 6 a kg to trade at Rs 30 a kg on Monday, with arrivals of around 500 tonnes.
Assembly elections in Maharashtra are scheduled later this month. The farmer protests are likely to affect the results, especially in the onion-growing belt of Nashik.
At Lasalgaon mandi, Asia's largest onion selling market, the onion price jumped Rs 1.50 a kg to Rs 32 a kg, the highest since January last year.
In the retail markets, fresh onion is sold between Rs 10 and Rs 12 a kg. Now, farmers have to sell onion at a loss of Rs 2-3 per kg if transport cost is included.
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