Prices of small onion has gone up to Rs.34 a kg from a mere Rs.11 a kg in the three-month period in the wholesale market here on Thursday, thanks to ever growing demand for exports and poor arrivals.
The onion whole sale commission agents hope that the prices will go up further in the days to come, due to the marriage season and other festivals.
Since the ban on export of small onions has been lifted, exporters have started procuring small onions in bulk quantities. They have been buying the entire arrival without worrying about the prevailing price. Demand for small onions is growing in Thailand, Malaysia, Singapore and other East Asian countries every day. Arrival to Dindigul market is around 3,500 to 4,000 bags (each bag containing 50 kg of onion) a day. The exporters have been lifting 95 per cent of arrival. This trend has been prevailing for the past one week.
With no arrival from domestic farmers owing to lack of season, traders manage to meet the growing demand of exporters with arrivals from neighbouring districts. At present, the market receives onions from Coimbatore, Tirupur and Erode districts.
Most beneficiaries of the price rise are onion growers from neighbouring districts. Arrival from domestic farmers will hit the market only after September.
Even as both farmers and traders are happy over better procurement price for small onion, one section is not happy. And they are small onion vendors, who procure onions in small quantities and sell in the retail market. Exporters leave only pittance for them to buy. Shortage of onions has hit the domestic market acutely. The retail sellers could sell onions only for Rs.40. All small buyers including hotels and restaurants had to share 300 to 500 bags left by exporters. If this trend of short supply continued, onion prices will shoot up sharply affecting domestic customers, worried retail sellers. Exporting only the surplus stock alone will solve the problem, they added.