What’s behind the sudden surge in onion prices? | Explained - The Hindu

**What’s behind the sudden surge in onion prices? – Explained**

The price of onions across several Indian states has jumped sharply in the past fortnight, prompting alarm among consumers and policymakers alike. According to market data compiled by *The Economic Times*, retail rates in major metros climbed from a low of **₹18‑₹20 per kg** in early August to **₹45‑₹55 per kg** by the first week of September. The surge follows a brief dip that saw prices fall to **₹15 per kg** after a modest harvest in the previous month, only to rebound as supply‑chain bottlenecks resurfaced. Traders on the National Spot Exchange reported that the *onion basket* has been one of the most volatile commodities this season, with volumes traded shrinking by nearly **30 %** compared with the same period last year.

Analysts point to a confluence of factors driving the price spike. Unseasonal rains in key producing regions of Maharashtra and Karnataka have damaged crop yields, while a sudden spike in demand from the food‑service sector—particularly after the easing of COVID‑19 restrictions—has strained already thin stocks. In addition, the *Kanda Express* logistics initiative, launched by the Tamil Nadu government, has been forced to reroute 840 metric tonnes of produce to Chennai under emergency conditions, underscoring the urgency of the shortage. Hoarding by middlemen, a legacy of past price volatility, has further amplified the upward pressure, as reported by *Rediff MoneyWiz*. Export restrictions imposed by neighboring Bangladesh and Nepal, which previously absorbed surplus Indian onions, have also limited market outlets, compounding domestic scarcity.

In response, Tamil Nadu’s administration has activated a multi‑pronged price‑control strategy. Starting **September 3**, state‑run fair‑price shops will sell onions at a capped **₹35 per kg**, a measure announced on *CNBC TV18* to protect low‑income households. Simultaneously, the state’s *Onion Express* program is dispatching additional consignments—totaling **840 MT**—to major urban centers to boost supply. The central government is monitoring the situation closely, urging other states to release buffer stocks and urging the Ministry of Agriculture to expedite procurement under the Minimum Support Price (MSP) framework. While the immediate price ceiling is expected to provide temporary relief, experts caution that without a substantial improvement in the harvest outlook, volatility could persist through the festive season.

---