The Impact of Heat and Supply Shortage on Onion Prices in Bhubaneswar
Farmers and agricultural stakeholders in Bhubaneswar are currently grappling with a sharp increase in onion prices, which have surged to Rs 50 per kilogram. This dramatic rise is attributed to a combination of factors including severe heat conditions causing high wastage, and a supply shortage exacerbated by recent changes in export policies.
Current Market Conditions
Just last week, onions were selling at Rs 25 to Rs 33 per kilogram. Now, they range from Rs 40 to Rs 50 per kilogram in retail markets. The lower quality onions are priced between Rs 40 to Rs 45, while higher quality ones reach Rs 50 per kilogram. In wholesale markets, the prices are Rs 7 to Rs 8 less than the retail rates, reflecting the significant markup necessary to cover losses from wastage.
The President of Chhatra Bazaar Traders’ Union, Debendra Sahoo, highlighted the core issues. “Since the Nashik markets have started exporting onions to other countries, the supply to Odisha has reduced. Also, a substantial part of the stock is damaged because of the heat. So, the vendors are forced to increase the price,” he explained. The volume of onions required daily in Bhubaneswar alone is between 70 to 80 tonnes, while Aiginia wholesale market needs about 200 to 250 tonnes per day, and Chhatra Bazaar in Cuttack requires nearly 50 tonnes daily.
Supply Chain Disruptions
Odisha relies heavily on onions procured from Nashik in Maharashtra and Kurnool in Andhra Pradesh. However, after unseasonal rains damaged crops last year, the Centre had imposed a ban on onion exports from Nashik to stabilize domestic supplies. This ban was lifted on May 20, leading to resumed exports and consequently reduced supplies to Odisha and other states.
The disruption in supply has been compounded by the current heatwave, which is causing significant spoilage of the onion stock. This spoilage is a critical issue, as it reduces the amount of marketable produce, driving prices up further.
Future Projections
Kabiraj Swain, President of the Vegetable Traders’ Association of Bhubaneswar, indicated that prices are likely to remain high until the new crop arrives from Kurnool, which is expected just before Ganesh Puja. This new crop will be harvested after the onset of rains, offering some relief to the market. Until then, the high prices are likely to persist.
Broader Implications
The surge in onion prices is not an isolated issue. Prices of other vegetables have also been on the rise. Potatoes have increased to Rs 90 for three kilograms, up from Rs 80 the previous week. Tomatoes and brinjals are similarly affected, selling at Rs 40 to Rs 50 per kilogram. The ‘desi’ variety of pointed gourd is at Rs 80, with the hybrid variety selling at Rs 35 per kilogram.
Sahoo noted, “The production of vegetables in Odisha is very low and whatever is being grown here will be available only after rains.” This situation underscores the broader challenges faced by the agricultural sector in the region, particularly the reliance on imports and the vulnerability to climatic conditions.
The current surge in onion prices in Bhubaneswar is a result of complex interplaying factors including supply shortages, heat-induced wastage, and policy changes affecting imports and exports. While government interventions and favorable weather conditions in the coming months may alleviate some of these issues, the current situation highlights the need for more resilient agricultural practices and better supply chain management to stabilize prices and ensure food security.
