Most of the major suppliers are from Karnataka and Maharashtra where the production has increased manifold this season.
Onion traders at the Gandhi Market in the city are not so happy with the trade for the past few months, in the wake of sudden fall in the prices of the produce.
The wholesale dealers procure three types of onion — Andhra, saambaar or chinna vengayam, and Bellary onion. Most of the major suppliers are from Karnataka and Maharashtra where the production has increased manifold this season.
“Onion prices reached a maximum and there was scarcity for the produce a few years ago. But the massive change in the cropping pattern in a few States particularly Maharashtra has resulted in huge production of onion. From wheat, the farmers have switched over to onion in a majority of belts in Maharashtra,” said P. Saravanan, one of the wholesale dealers at the market.
He points out that his investment was higher often and he had to even incur loss in his capital. “Every a load of truck meant an investment of Rs. 1.80 lakh for procuring 16 tonnes. It included the labour wages towards unloading, cleaning, and grading of the produce,” he said. At times, he had to market the truck load (16 tonnes) for about Rs. 1.75 lakh. The margin was far less because of the fall in demand for onion, he added.
S.K. Peer Mohamed, a retail dealer from Ponnamaravathy, who came to the Gandhi Market, said he used to sell onion at the weekly shandy in Ponnamaravathy and Devakottai. Previously, he used to buy a large number of bags of onion but has now reduced his demand. From 15 tonnes, he has brought down the purchase to 10 tonnes a week now. As he owns a mini lorry for transporting the onion from Gandhi Market to Ponnamaravathy, he could curtail the investment to some extent.
Both Mr. Saravanan and Mr. Mohammed say he onion would fetch attractive returns, if it was sold within two days after arrivals. “Otherwise, it discolours and loses its attraction among the customers,” they said.
The fact that the sub-jail road sports a limited trading activity on Wednesday indicates that the onion has lost its lustre. The spot is usually abuzz with 70 wholesale dealers together with labourers were normally involved in loading, unloading, and grading the produce.