Economics Behind Hike In Onion Price

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Economics-Behind-Hike-In-Onion-Price

We have been seeing that onion price is going high day by day. The government is giving many subsidiaries to farmers, common man but still, the price is not coming down. To understand this we need to know the inside economics of Onions and its rising price.

Just imagine, we buy a Mango in summer season for 10/-, the same Mango costs 30/- in another season.

The reason behind this is the SUPPLY AND DEMAND concept. In the summer season, there is more supply of mangoes and there is more demand. So, the price is obviously low. Whereas in other seasons, the Mangoes production is very less and the demand is the same. So, will be sold for more cost.

In the same way, onion is also a seasonal crop. Every year from September to November when the onion is yet to harvest, we feel these high prices. And you know, the government responds only after the public goes against them.

onions-price

Indian onions are famous all around the world for their taste which can’t be found in any other country. So, people try for more desi onions than going for foreign. So, in the months of September and mid-November, we find white onions in markets, and obviously we have already eaten all the desi brands and we don’t like to buy the foreign onions and so, the inflation starts.

You must have got a question, Mangoes and Onions are seasonal crops as mentioned above, but we eat Mangoes only in summer but we eat onions all over the year and of course daily. 

The answer is here, Mangoes gets rotten soon, or if we want to eat them in other seasons, the food processing industry processes them stores them and then gives them to the market to sell. But, the situation is not the same for onions. Storage of Onions needs some extra care. The onion should not get vapourised. So, special storage units should be used for storing the onions. And such storage units are not rigidly available in India. 

 

The government also knew that the problem of onion shortage comes every year but still the government is not able to meet the demand.

But, the government responds after the issue starts emerging. We import the onions of desi taste from Italy and such regions and meet the demand. Govt introduces temporary storage units and by the end of December, the onion supply and demand balances and then again govt forget.

The issue and wait for next September, November and December months.

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