Onion prices likely to fall this year as govt forecasts 7% rise in production

Onion prices had skyrocketed to Rs 100 per kg in several parts of the country last November due to a 30-40 per cent dip in its production.

Onion prices have spiked across markets in recent weeks | Dhiraj Singh | Bloomberg

New Delhi: Onion prices are expected to come down this year after prices skyrocketed to Rs 100/kg last month, which saw this kitchen staple go off the shelves.

According to the agriculture ministry’s 1st Advance Estimates of 2019-20 of Area and Production of various horticulture crops, that was released Monday, the country is likely to see an overall 7 per cent increase in onion production.

The report notes that onion production is expected to rise to 24.45 million tonnes (MT) in 2019-20 from 22.82 MT in 2018-19. The area under onion crops has also increased to 12.93 lakh hectare in 2019-20 from 12.20 lakh hectare in the previous year.

“Onion prices are likely to deflate and remain low this year,” an agriculture ministry official, who did not wish to be named, told ThePrint.

Onion prices had skyrocketed to Rs 100 per kg last November due to a 30-40 per cent dip in its production which was largely attributed to excess monsoon rainfall in Maharashtra and Karnataka — the two main onion-growing states.

Wary of the fallout of rising onion prices, the government decided to import around 36,000 MT onions from countries such as Turkey, Egypt and the Netherlands.

Potato, tomato prices also likely to drop 

The first estimate report also states that prices of other staples like potato and tomato will also deflate due to an increase in their production this year.

Potato production is expected to be around 51.94 MT, with an increase of 3.49 per cent over 50.19 MT in 2018-19. Tomato production is also expected to increase to 19.33 MT, which is an increase of 1.68 per cent as compared to 19.01 MT in 2018-19.

Also, the overall production of vegetables is estimated to be higher at 188 MT in 2019-20 from 183 MT in the previous year.

Fall in output of mango, banana and grapes

Among fruits, the production of apple is expected to be higher at 2.73 MT this year compared to the final output of 2.31 MT last year. But the report states that production of mango, banana, grape and pomegranate are likely to fall.

While mango production is estimated to decline slightly to 21.28 MT in 2019-20 from 21.37 MT in 2018-19, the production of bananas may also dip to 29.64 MT from 30.46 MT this year.

Overall, the total production of horticulture crops is estimated to be at 313.35 MT in 2019-20, rising up from 310.74 MT of 2018-19. The production of spices is estimated to drop to 9.37 MT from 9.42 MT.

The total horticulture production in 2019-20 is expected to be 0.84 per cent higher than 2018-19.