Onion prices likely to stay high till Diwali; Centre releases buffer stock

The weather is the biggest influencing factor with late rain causing large-scale damage to harvest-ready crops.

"There is a great deal of ambiguity. If the weather continues to be a hindrance, costs may rise much more. However, if we get good weather, prices might be constant until Diwali,” said H.S. Bhalla, an onion dealer from the Azadpur APMC in Delhi.

Lasalgaon market, the biggest wholesale supplier to Delhi, saw its onion prices double over the previous month. Hubali market in north Karnataka, which is a major supply centre of kharif crops like onions, also witnessed a near 100 percent jump in the prices.

Bengaluru APMC similarly saw its onion prices more than triple over the last month.

High fuel prices, heavy rains drive up vegetable prices in Delhi

The Centre has begun increasing its supply to areas that have been witnessing prices higher than the national average.

The Ministry of Consumer Affairs has also released buffer stock -- 67,357 tonnes of the 208,000-tonne buffer stock established for 2021-22 had been released as of October 12, the ministry stated in a press release. Delhi, Kolkata, Lucknow, Patna, Ranchi, Guwahati, Bhubaneshwar, Hyderabad, Bengaluru, Chennai, Mumbai, Chandigarh, Kochi and Raipur were some of the areas where the buffer stock was released.

"Over the last several days, onion prices have dropped by Rs 3-4 per kg. Prices can stay constant at current levels if there is no further rain in the coming days," said Ajit Shah, head of the Onion Exporters' Association.

Apart from onions, tomato prices have been affected as well. Desi tomato prices have gone up in the retail markets across Delhi as well as in the NCR region, where tomatoes are selling at Rs 80-90 per kg.

The prices of other vegetables have also increased by Rs 10-15 per kg in the wholesale market and by Rs 15-20 per kg in the retail market, data from agricultural produce market committees showed.

While WPI inflation figures had eased in September on the back of lower vegetable prices, the renewed increase in food item prices along with the continuing hike in energy cost are expected to send the inflation rate soaring once more.