Onion prices in India will fall by 42% to 40 rupees ($0.48) per kilogram by January 2024, according to the government.

Consumer Affairs Secretary, Rohit Kumar Singh gave the timeline of the price reduction on December 11. Briefing the press at the Deloitte Growth with Impact Government Summit, Singh emphasised that prices will meanwhile remain below 60 rupees ($0.72).

As of December 12, the average retail price, per the Consumer Affairs’ statistics, was 57.02 rupees ($0.68) a kg. 

A week beforehand, onion prices in India peaked at 80 rupees ($0.96) per kg in New Delhi’s retail markets. The price magnification prompted the government to set an invincible minimum export price of  66, 708 rupees ($800) per ton. The aim was to deter exports and lower the consumer price at home. 

Following a slight domestic supply rebound due to nil onion exports, Consumer Affairs is now confident of its low price promise. This is despite the fact that India’s onion inflation is still high, at 42.1%.

Government Buys  from Farmers to Stop Impending Onion Ban Protest

Amid the respite in price for retail consumers, wholesalers and traders are readying for a protest against the export ban. The action has made the government to purchase 2 lakh tonnes (200,000 tonnes) of kharif (monsoon) onions to promote farmers.

This generous gesture follows the government’s raise of its onion reserve bank to 7 lakh (700,000) tonnes. This is 5 lakh (500,000) tonnes more than the original target of  2 lakh (200,000) tonnes, a buffer against 2024 shortage.

Farmers are worried that the onset of the kharif crop is already bringing wholesale prices considerably down to unprofitable margins. On December 11, prices at Asia’s biggest onion market at Lasalgaon in Nashik district fell to 2,200 rupees ($26.38) per quintal. This was a loss of 1,100 rupees ($13.19) from the previous week’s high of 3200 rupees ($38.37) per quintal.

Government Buys and Resells Onions

In the meantime, the government has been buying and reselling onions by place demographics to foster a price balancing effect. By December 7, the state had purchased and sold 2 crore (20 million) onion bulbs around India.

The government’s strategy is purchasing onions from high yield markets and reselling them in low-yield places to bring price parity. 

India hopes that the belated kharif onion crop will help reverse the price climb and realise an amicable January price floor.