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Onion prices set to climb again in September-November, erratic monsoon to blame: Crisil report

Cyclone Tauktae in May increased moisture in stored rabi onions, and now kharif crop is expected to be delayed, leading to shortfall in supply as demand rises in festive season.

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New Delhi: The price of onion, a staple kitchen commodity, is likely to climb steeply again during the lean season of September-November. According to a report by Crisil research, the erratic monsoon rainfall this year is set to lead to a delay in the harvest of the kharif crop, which is likely to drive up the prices as the demand increases in the festive season.

The fact that the monsoon arrived early this year, on 3 June, had signalled a good start to the kharif season, and farmers preferred crops such as onion and chilli over highly perishable ones like tomato. However, the report pointed out that in July, there was a ‘break’ in the monsoon, with the rainfall registering a 2 per cent deficit over the average for that time of the year, while in August, a key month for crop transplantation, the figure was a 9 per cent deficit.

The kharif onion crop is usually sown in June-July and harvested in October­-November, resulting in the months of September to November being the lean season for the commodity, as by then, the rabi onion stock from earlier in the year is almost depleted, and the fresh harvest comes to the market at its own pace.

The fact that the kharif onion grows through the monsoons results in a higher moisture content and low shelf-life, but it serves as the bridge in supply in the heavier-demand months from September to November, which is the festive season in most parts of the country.

This year, even the stored rabi crop was affected due to Cyclone Tauktae, which struck the key onion-producing regions of Maharashtra and Gujarat in May 2021, leading to increased moisture content and shorter shelf-life. Thus, supply is likely to be affected, pushing up prices.

Onion price had skyrocketed above the psychological benchmark of Rs 100 per kg for the last two years, 2019 and 2020, due to crop damage caused by extreme weather events such as heavy rainfall and cyclones. The crop situation was last normal in 2018, with unremarkable prices and decent crop output.

Last year, onion prices had hit twice the levels registered in the ‘normal’ year 2018, the Crisil report stated, giving the reason that supply was disrupted by the heavy and erratic monsoon that damaged the kharif crop in Andhra Pradesh, Karnataka and Maharashtra.


Also read: Wet June, erratic July, dry August — 2021 monsoon follows pattern of climate change warning


Deficit rainfall in Maharashtra

The Crisil report said rainfall is particularly critical for onion crops during the transplantation period, as it allows seedlings to root firmly in the soil and ensures good bulb development. However, this year’s fluctuating monsoon posed challenges in transplanting the crop in Maharashtra, which accounts for 35 per cent of the total kharif onion crop produced in the country.

Nashik, which contributes more than one-third of the kharif onion produced in Maharashtra, faced a rainfall deficit of 33 per cent by end of the crucial transplanting month of August. Pune, which contributes 13 per cent, witnessed a rainfall deficit of 65 per cent by 30 August.

The report pointed out that many farmers who had set up nurseries in anticipation of good returns were unable to transplant due to the erratic monsoon. This is likely to delay the processes and could result in the late arrival of the onion crop, further widening the supply-demand gap.

It also stated that if untimely downpours occur in key kharif onion-producing states like Maharashtra, Karnataka and Andhra Pradesh in September and October, the crop damage could bring “more tears with price inflation and reduced supplies”.

(Edited by Shreyas Sharma)


Also read: Indians are cutting down on essentials like onions, wheat to afford fuel hike, survey says


 

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