In just two weeks, Hyderabad's onion prices have increased by 25–40% due to decreased arrivals and increased demand in anticipation of Bakrid on june 17. This increase coincides with a production deficit in maharashtra, the nation's top onion-producing state, which is made worse by drought-like circumstances. This, together with slower government purchases to keep a buffer stock, has caused onion prices to spike during the last month.

Onions have seen a 15% spike in wholesale price and a 25% increase in retail pricing in Hyderabad. A year ago, wholesale rates were around Rs 1,581.97 per quintal and retail prices were about Rs 20 per kilogram. Retail costs per kilogram are currently between Rs 40 and Rs 50, up from between ₹20 and Rs 30 a month ago.
In hyderabad, traders report robust internal demand for onions ahead of Bakrid, despite slow export rates due to a 40 percent export levy. Since the arrival of the next kharif crop is not expected until september or October, market analysts believe that prices might go over Rs 50 to Rs 60 per kilogram. This year's restricted government agency procurement has prompted merchants and farmers to hoard their inventory in anticipation of future price increases.

According to Hyderabad-based onion seller Jameel Ahmed, "reduced government procurement has led traders and farmers to stockpile onions, intending to sell them when prices peak." The wholesale market price ranges from Rs 25 to Rs 30 per kilogram, while the government sets its purchase price at about Rs 21. This disparity has encouraged farmers to cling to their stock to receive higher prices.

Due to the severe drought, maharashtra, which produces more than 42% of the nation's onions, has seen a 15-20% fall in production. According to data, 27 districts in maharashtra experienced inadequate rainfall, with percentages ranging from -20% to -45%.
Furthermore, the state saw intense heatwaves in May and june that affected the onion-growing regions by sending temperatures across Central india jumping to between 44°C and 48°C. This extended warmth had an impact on the quality of onions that were kept in addition to reducing output.

The impact is being felt in hyderabad and other metropolises, and as players look for ways to stabilise prices and guarantee a sufficient supply in the upcoming months, the need for further government action is becoming stronger.


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