Demonetisation stems increase in onion prices

NASHIK: The average wholesale onion prices had started shooting up in November due to inadequate supply, but the demonetisation has not only stemmed the rise but also led to its decline.
According to Agricultural Market Produce Committee (APMC) sources, the average wholesale onion prices of onions (new kharif) had increased from Rs 800 to Rs 1,400 a quintal in a week up to November 8 due to the drop in supply.
The average wholesale prices were expected to touch Rs 2,500 a quintal in the couple of weeks in the same month, But the demonetisation drive has hit the hard the onion farmers, who were expecting good rates and the prices reversed again up to Rs 800-900 a quintal.
Even the retail prices had also doubled from Rs 10 to Rs 20 a kg in the retail markets during the first fortnight of November.
The government announced demonetisation from November 8 midnight. The average wholesale onion prices had increased up to Rs 1,400 a quintal in just a week by November 8. The summer onions had exhausted, while new kharif crop had started arriving but in a low volume of 50-100 quintals a day.
The regular arrival had declined from 15,000 quintals to 4,500-5,000 quintals a day. But the Lasalgaon APMC and other market committees had to stop auction for eight days from November 10 as the traders did not have cash. They started auction from November 21 by making payments through cheques.
Speaking to TOI, Jaydatta Holkar, chairman, Lasalgaon APMC said, “We have to stop onion auction for almost 10 days due to the lack of cash. The purchase by traders had also declined. Moreover, the demand had reduced in retail market. The average wholesale onion prices would have touched Rs 2,500 a quintal, but demonetisation hit the wholesale prices.”