Onion priced at over ₹100 a kg as wholesale-retail price gap widens

Onion being sold at ₹100 a kg at a vegetable shop in Bengaluru last week.   | Photo Credit: K. MURALI KUMAR

At a grocery store near you, the onion, a staple in most homes, has been selling in the range of ₹100 to ₹120 a kg for a few days now. While extensive crop damage due to heavy rains in August-September has created a demand-supply gap in the market, driving onion prices north, retailers are allegedly artificially increasing the prices, earning a windfall.

The wholesale price of onion at the Yeshwantpur APMC market is in the range of ₹60 to ₹70, according to Udayashankar, president of Bangalore Onion and Potato Traders’ Association.

“In fact, arrivals improved over the past week and onions from Molakalmuru and Indore are coming into the market. The stocks are better when compared to previous weeks. This has also led to some correction in the wholesale price,” said Ravi Kumar, senior onion merchant at the Yeshwantpur yard.

But the retail prices are still abnormally high, with no signs of a correction. “Usually the difference between the wholesale and retail price at this cost price is around ₹10, accounting for transport and profit margin. But many retailers seem to be selling them for a windfall margin of ₹30 to ₹40 a kg,” said a senior procurement officer at a retail grocery chain in the city. The retail chain he works for was selling onion at ₹85 a kg on Monday.

“Retail prices of onions have crossed the ₹100 mark in several metro cities across the country, and this has even turned into an election issue in Bihar. This has since dominated media reports, in both national and regional media. This narrative has given licence to retailers to jack up prices artificially,” said a senior onion wholesale trader, who did not wish to be named. “In our case, there have been arrivals from Molakalmuru, Chitradurga, though not as much as in previous years, apart from arrivals from Nashik and Indore,” he said.

However, given that the next crop of onion is expected only by January and the present crop yield is already depleting against the demand, the wholesale price is only expected to increase. It might breach the ₹100 mark in the coming months, Mr. Udayashankar said.

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Printable version | Nov 28, 2020 1:49:48 PM |

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