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Indian onion prices continue to rise amid unfavourable weather conditions

October 19, 2021

2 mins read

 

The average price of Indian onion rose by 60% in the two weeks up to 13th October 2021 due to unfavourable weather causing supply shortages. The 2021 monsoon season arrived early in India, signalling a positive outlook for harvest. However, July and August faced a deficit in rainfall of approximately 9% compared to the average precipitation for that time of the year, causing a delay in Kharif onion harvest (cultivated from June-November) in some important regions in India.

The uneven distribution of monsoon rains hit India's key production areas. Maharashtra, which accounts for over one-third of India’s total Kharif onion production, faced challenges in transplanting the crop in August due a rainfall deficit. As a result, this delayed the arrival of the onion crop for this season. Gujarat, another key producing state of onions, experienced the highest rainfall in almost a decade in September. Heavy rainfall resulted in severe flooding, which damaged crop and delayed farmers’ planting season this year.

The impact of the erratic monsoon rains has led to a supply shortage, causing a spike in prices in early October 2021. The Department of Consumer Affairs announced that onion stocks are being released onto the market in October to mitigate the risk of a price spike. This could ease supply pressure, thus stabilising the price over the short term. However. As India approaches the festive season, expectations of tight supply and strong demand could keep onion prices firm in the market.

India / Jun 2021 – Sept 2021/ Precipitation (% change)

Apr                                          May                                   Jun                                     Jul

Alice Witchalls
Alice Witchalls

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