Market linkages for the major onion markets in India

Abstract

India is the second largest producer of onion in the world. Though newer states, like Bihar and Madhya Pradesh, are emerging in onion production; onion is still largely concentrated in the states of Maharashtra and Karnataka, one dominating in rabi onion and the other one in kharif onion. Despite tremendous production growth and trade opportunities, India suffers from very high volatility in onion production. Markets in the leading state i.e., Maharashtra, are pre-dominant in terms of onion supply and distribution and thereby creating strong influences on other markets. Lasalgaon, Pimpalgaon, Bangalore and Solapur are the major markets transmitting price signals to other major consuming and producing markets. The market surveillance needs to be given due priority to control for any imperfections and malpractices arising due to advance signals. The instability in production can be reduced by diluting regional concentration of onion production. Stabilisation through stocks by public sector agencies like NAFED will help reducing the exploitation and market manipulation by private traders. The storage capacity needs to be enhanced at the grass root level. Effective use of Government schemes like “Price Stabilisation Fund” and “Operation Greens” would help in creating mechanisms and logistics to control the price volatility.