The onion prices have skyrocketed in the past few days. Know here the real reason behind this rapid rise.
The country witnesses huge fluctuations in the prices of onions every year. When in the initial months of the year, the farmers were devastated by the sudden and steep drop in the prices of onions, no the prices of the same skyrocketed leaving the common man in dilemma.
From Rs 5-10 per kg six months ago, the onion prices stand at Rs 70, 80, 90 and even Rs 100 per kg. Experts are assuming that the prices can go as high as Rs 150 kg also.
This sudden dip and rise in onion prices trigger curiosity about the reason behind this fluctuation. There are two possible explanations that come out, one is the rise in demand and shortage of supply and the second reason is that onion prices have increased two to three times in the last few days.
Market experts are assuming that the onion prices will hit Rs 150 per kg in November.
While the first possible explanation behind this is a gap in demand and supply, but, it is interesting to know that onions are harvested in India twice a year. Onion is harvested once in the Rabi season (November/December) and again in the Kharif season (June/July and September/October). This means that onions are grown in the country throughout the year, making India the second-largest producer of Onions.
You may be wondering why, even after being grown throughout the year onion prices shoot up every year.
Well, one of the primary reasons behind the price fluctuation is that the farmers who grow onions sell them to the international market to earn more money triggering a shortage of supply in the country, as per DNA TV Show.
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To limit the sale of onions in the international market, the government has introduced a 40 per cent Export Tax. Whereas, there where no Export Tax on onions earlier. The centre has fixed the Minimum Export Price (MEP) for onion export at Rs 66,730 per tonne.
Meaning, no onion trader can export onions at a price lower than this till 31st December. The government is also selling 2.5 lakh tonnes of onion kept in the buffer stock of Nafed in the local market at the rate of Rs 25 to Rs 30 per kg.
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