Most houses in India use onion and tomato to make the base sauce of their daily food.
So, onion and tomato are staples in Indian cooking. Any increase in the price of these vegetables affects a lot of families.
India is the world’s second largest producer (after China) of onions. It is also the world’s largest exporter.
The country has exported 2,525,258.35 MT (2.5 million metric tonnes) of fresh onion to the world, worth Rs. 4,522.79 crores/ 561.38 USD Millions during the year 2022-23. In the first half of 2023 alone, Indian onion exports stand at about 1.46 million metric tons – an increase of about 63% from the same time last year.
The Government of India also buys onions from the farmers. This is done both for India’s public distribution system and for the country’s food security. A certain quantity, called “buffer” is kept by the government.
In 2022, the government increased the buffer to about 2.5 lakh tonnes. In 2021, this buffer was 2 lakh tonnes. Later, it was increased to 3 lakh tonnes.
In 2023, the buffer has been doubled to 5 lakh tonnes.
Our production has gone up through the years too.
What happened to the prices?
As we already know, rains affect food prices. Good rains mean a good harvest. Flooding means that the standing or sown crops are washed away and there is no food to sell.
This year, many parts of the country experienced flooding.
We are not sure if the scarcity was created by traders, or there was a genuine shortage of tomatoes and onions. This is because the official production numbers take time to come.
But, since these are staples in Indian cooking, the government has taken steps to ensure that the price rise is temporary and is quickly stopped.
On 20th August, 2023, the government has indicated that 14,000 metric tonnes of onions have been released to the local markets to increase supply and reduce prices.
As of 26th August, the average price per quintal in the wholesale mandi (market) is 3,650 rs per quintal. This translates to 36.5 rs per kilogram in wholesale. This means that the retail price of onion should be around 50-60 rs per kilo in the retail market.
The lowest price today is 400 rs per quintal (Bhinmal, Rajasthan), while the highest is 11,500 rs per quintal (Nagaland).
For tomato, the average price is 3550 per quintal (all India). The highest is 5000 per quintal (Sahnewal, Punjab), while the lowest is 1500 rs per quintal (Punjab and Karnataka).
The prices are falling on a daily basis.
Annual Event
Every year, we observe a drastic increase or fall in the prices of these commodities for a few weeks. Thanks to the buffer stocks, the situation is soon normalised.