November inflation figures may bear imprint of rise in onion prices

Pune: A 21% increase in onion prices in just four days to a five-year high of more than ₹60 per kg in several markets is likely to weigh on inflation data for November, said market experts. Potato and cooking oil prices are also expected to stay higher this month, the experts said.The trend of higher vegetable prices in October is continuing this month with a marked sharp rise in onion prices. Prices of old onions surged by 21% in four days at Lasalgaon to ₹57.70/kg on November 7 from ₹47.70/kg on November 4.

“We were expecting a bumper harvest of kharif crop. However, the rainfall in September has damaged as well as delayed arrival of the new crop,” said Vikas Singh, vice president of the Horticulture Producer Exporters’ Association.

RBI governor Shaktikanta Das said on Wednesday that the Consumer Price Index (CPI) number in October is likely to be higher than September’s 5.5%.

Rating agency Crisil noted that the cost of a vegetarian thali and a non-vegetarian thali has risen by 20% and 5% respectively in October mainly due to higher prices of onions, tomatoes and potatoes along with cooking oils.

S Ananadan, an onion trader in Bengaluru said rainfall impacted the quality of onions. “Prices range between ₹10-60/kg for the new crop due to quality issues and between ₹60-70/kg for the old crop,” he said.

Traders attributed the price surge to lower supplies as markets were closed for four days at most places due to festivals.

Tomato prices have shot up by about 25% in a week at the Pimpalgaon APMC in Nashik, one of the leading suppliers of tomatoes, to ₹26/kg on November 6 from ₹20/kg on November 1. However, the prevailing prices are 50% lower than a month ago. Average wholesale prices had hit a high of ₹50/kg on October 1 at Pimpalgaon.

According to Agmarknet, which compiles market rates across the country, tomato prices are ruling higher in Delhi than many other markets in the country with the highest rate touching ₹48/kg on Wednesday compared to the average of ₹34/kg. In other markets like Mumbai and Bengaluru, tomatoes cost between ₹20-25/kg.

Crisil expects potato prices to take more time to moderate. “We expect tomato prices to stabilise in November.

Onion prices should moderate with kharif arrivals in mandis, while potatoes may take slightly longer to show a moderation in price,” said Pushan Sharma, director-research, Crisil Market Intelligence and Analytics in a research note this week.

Tomato and onion prices are expected to moderate in 10-15 days, said market functionaries.