Is onion the next tomato?

The supply crunch of onion has skyrocketed its price and has made it currency equivalent. This apparently would help farmers gain but hurt the retail buyers. Onion prices have been volatile in India primarily because of climatic conditions

that have played now-an-ally, now-a-foe to the crop.

So there are 3 onion-growing seasons in India- kharif, late kharif and rabi. Furthermore, unseasonal rainfall in the key growing regions during March affected the quality of onions and reduced the shelf life of rabi onions from 6 months to 4-5 months, raising storage concerns and inducing panic selling among farmers. Thus the rabi crop which was scheduled to be traded in the market in March started trading in February coinciding with the late kharif crop leading to an oversupply of onion. This has caused market prices to crash with prices lower on year by 21%, 13%, and 2% in March, April, and May, respectively.

Owing to the reduced shelf life of rabi onion by 1-2 months and panic selling that ensued in February-March 2023, 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.

Ultimately it will also depend on the rainfall pattern. However, the prices are expected to remain inflated until the arrival of late kharif.