Cultivators say favourable weather, hope of good returns led them to borrow heavily at high rates to plant bulb, but falling prices now leading to losses
Cultivators say favourable weather, hope of good returns led them to borrow heavily at high rates to plant bulb, but falling prices now leading to losses
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The falling rates of onion may have brought back some cheer in your kitchen, but it may spell doom for farmers.
The news of the likelihood of onion prices climbing down to Rs 10 a kg in local retail markets has come as a shocker for many farmers here, who borrowed heavily and at high rates from moneylenders to cultivate the bulb. They were expecting good returns because of the recent astronomical spike in onion prices.
Farmers from Nashik district sell onion at the Agriculture Produce Market Committee yesterday
Over the last fortnight, farmers have managed to produce huge quantities of onion because of favourable weather conditions, but they fear that the surplus in the market could lead to a downward spiral in prices and, thus, heavy losses for them.
Yesterday, 16,827 trucks of onions were unloaded at the local Agriculture Produce Market Committee (APMC). The produce fetched farmers Rs 4 per kg yesterday, or half the Rs 8 per kg it was going for on Thursday.
Fearing less or no returns, hundreds of local farmers staged a protest in front of the APMC building, demanding the lifting of the ban on onion export.
"If the ban is lifted, prices of onions will stabilise and not slip further," APMC Secretary Sanjay Patil told MiD DAY.
Other options
Traders feel that if the prices dip further, farmers will be forced to switch to other crops, which will cause another hike in onion prices.
"Weather conditions in the region have been extremely favourable for cultivating onions, leading to their supply increasing manifold. The demand has not, however, kept up with the spike in supply," said APMC president Narayan Pote.
Madhar Choudhary, a farmer from Kanmandale in Chandor district, said, "I invested Rs 5,000 in growing 10 quintals of onions, but I barely managed to earn Rs 3, 000 from selling the produce. If this trend continues, I fear I will be out of business in no time," said Choudhary.
Hoarding again?
It will take some time, however, for city folk to feel the full impact of the increased supply. Onions are currently selling for around Rs 40 per kg in Mumbai and experts say traders may take to hoarding again to prevent a sharp decrease in prices.
Number Game
Rs 4
Price per kilo at which farmers sold onion at APMC in Pimpalgaon, Nashik, yesterday
Rs 40
Price per kilo that onions fetch in Mumbai markets
16,827 trucks of onions unloaded at APMC, Pimpalgaon, yesterday
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