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Farmers fear onion prices will crash as India looks at 3rd consecutive year of bumper crop

Onion production in 2018-19 is projected to be around 23.48 million tonnes (MT), 0.95 per cent higher than the year before.

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New Delhi: India is set for a third consecutive year of bumper onion crop production in 2018-19, according to the Union Ministry of Agriculture’s third advance estimates.

The production of onion last fiscal is projected to be around 23.48 million tonnes (MT), 0.95 per cent higher than the previous fiscal, said the estimates released last week.

The increase in production has been projected despite a drop in area under cultivation. In 2017-18, 12,85,000 hectares in the country was under onion crop. This year, the number dropped by 22,000 hectares to 12,63,000.

India has already seen two consecutive years of bumper onion crop, and as a consequence, price crash.

In 2016-17, onion production soared to around 23 MT. Subsequently, onion prices in the wholesale market fell 41 per cent from Rs 21 per kg to Rs 12. The following year, production climbed to 23.26 MT and prices plummeted further.

It is worth noting that the average onion production between 2013-14 and 2017-18 was 20.9 MT.

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Monsoon effect

Nana Patil, a board member of the National Agricultural Cooperative Marketing Federation of India, told ThePrint that the surplus monsoon has ensured a decent output in onion production this year.

“Due to flood around the Karnataka-Maharashtra border there may have been a temporary supply shortage of onion but the supply chain has restarted especially from early kharif onion producing states like Karnataka and Andhra Pradesh,” added Patil.

Onion producing areas of Maharashtra and Karnataka — major states for the crop — suffered severe floods this monsoon season.

Narendra Wadhavane, secretary of Agricultural Produce Market Committee, Lasalgaon (near Nashik), which is the country’s largest wholesale hub for onion, said, “Due to floods and excessive rainfall, onion from Maharashtra and especially from Nashik and Solapur region might reach the market with slight delay by Diwali whereas earlier it used to be in markets by the first week of October.”

However, it will be important to protect Maharashtra’s onions farmers from subsequent price drops as their products will reach a bit late to the market, he added.

Maharashtra is the leading producer of onion in India with a production share of around 38 per cent. This is followed by Madhya Pradesh and Karnataka with 16 per cent and 12 per cent shares, respectively.

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