Price instability of onion in India –An analysis

Onion is an important vegetable crop grown and consumed widely across the world. Even though India is the second largest producer of onion, its production in 2019 is nearly halved in comparison to 2018. There is a deficit of about 40 per cent in onion supply and hence supply is unable to cope up with the demand which resulted in the skyrocketing of prices. It is learnt that the prices of onion were hovering around Rs. 100 per kg. The sudden rise in prices of onion can be attributed to reduced sowings on account of delayed monsoons followed by excessive rainfall, mainly during harvesting season. Moreover, as per the media reports, few onion traders are trying to make a short term gain by creating artificial scarcity. The sharp rise in prices can be checked by releasing the stock available with the government agencies in short run and there is a dire need for a long term policy for stabilization of onion prices.