Onion prices jumped to two-and- half year high of Rs 24 per kg due to tight supply and strong Ramadan demand.
Wholesale rates at Maharashtra's Lasalgoan, the Asia's biggest wholesale market for onion, soared almost five times higher than levels at the same time last year, stoking fears of retail prices rocketing across the country.
Retail prices of onion in Delhi ranged between Rs 30 and 35 per kg and there were fears that it may climb further due to spiral in wholesale rates.
Onion price of Rs 24 at Lasalgaon today compared to Rs 4.70 a year ago, according to the data maintained by government research body NHRDF.
Wholesale onion price, a politically sensitive commodity, had reached this level and even higher up to Rs 38 a kg during December-January 2011 at Lasalgoan. Retail prices had then skyrocketed to Rs 100 per kg across the country, forcing government to curb exports.
According to traders and experts, wholesale onion prices are expected to remain firm till September, as supply has been affected due to rains and farmers have also started holding up stocks hoping for better price.
In Delhi, retail prices of onion are ruling at Rs 30-35 per kg and prices are expected to rise further with increase in wholesale price at Lasalgoan. "Due to rains, supply has affected. Some pressure on prices is expected. Consumers must use onion judiciously till new crop starts arriving from September onwards," said a senior official at Nasik-based National Horticulture Research Development Foundation (NHRDF).
The fresh arrival of northern variety of onion has got over and presently the demand is being met through old stocks stored in godowns, he added. New crop from Maharashtra, Andhra Pradesh, Karnataka and Rajasthan is expected to hit market from September.
Overall, onion production is expected to be normal at around 15-16 million tonnes this year, the NHRDF said. Already, consumers are bearing the brunt of high tomato prices at Rs 50-60 per kg because supplies got disturbed due to heavy rains in growing states.