Onion prices likely to hit ₹60-70/kg in September: report

Mumbai onion prices to rise to ₹60-70/kg in Sep due to supply crunch. Rabi stocks to decline by Aug-end, leading to higher prices. Kharif output to fall 5%, but major supply crunch unlikely. Rainfall in Aug-Sep to determine plantation & bulb development.

Onion prices are likely to start shooting up in the retail market towards the end of August before going up further to around ₹60-70 per kg next month due to tightened supplies, a report said on August 4.

However, the prices will remain below the highs of 2020, it said.

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"The supply-demand imbalance is expected to reflect in onion prices towards end-August. As per our ground interactions, prices are expected to show significant increase from early September in the retail market, reaching up to ₹60-70 per kg during the lean patch. However, prices will remain below the highs of 2020," according to the report by Crisil Market Intelligence and Analytics.

The report stated that owing to reduced shelf life of rabi onion by 1-2 months and panic selling in February-March this year, rabi stocks in the open market are expected to decline significantly by the end of August instead of September, extending the lean season by 15-20 days, which is likely to expose the market to tightened supplies and high prices.

Onion supplies will ease once kharif arrivals start from October, leading to softening of prices, the report said.

The price movement in the festive months (October-December) is expected to stabilise, the report stated.