The Chronicles of Onion

A simple Google search on ‘Onion crisis in India’ throws up hundreds of links to articles discussing how rising onion prices is leaving Indians teary eyed. This essential commodity can sell anywhere between Rs. 8-10 in low demand seasons to as high as Rs. 100-150 per kilo in peak seasons. The dramatic rise in prices can be attributed to erratic rainfall, crop losses, high demand in festive seasons and even hoarding by traders/middlemen alike. During peak seasons, one cannot ignore but notice this star vegetable making headlines in newspapers more often than cricketers or movie stars.

The popularity of onion is not limited to Indian publications only. In 2013, TIME magazine took notice and published an article on how the surging onion prices is pushing up inflation and jeopardizing the local governments in India. Just last year, the prestigious New York Times covered the angry moods of junta in Nepal & Bangladesh who rely on onion imports from India. The knee-jerk reaction of banning exports left the onion consumers in these countries high and dry.

What makes onion indispensable? Onions are considered basic ingredients in many Indian dishes. There is really no substitute of aroma and flavours of onion. Almost, every dish needs onion and this angers retail customers, F&B industry and Food Processing Industry whenever the prices skyrockets. Rising prices of onions have even voted governments out of power in the past.

On the face of it, Onion-omics suggests there shouldn’t be much of an issue. India is already the world’s second largest onion producer after China and has the highest area under cultivation. The domestic demand is robust, and onions are even exported to neighbours in subcontinent and beyond. But this situation begets the question, ‘what exactly the issue is and why do we still reel from the fluctuating onion prices still every year?’ To answer the question, we must deep dive into the lifecycle of onion as a crop.

Onions are grown every year in two seasons and is taken to various post harvesting processing activities before it reaches the end consumer. In the onion lifecycle, various stages like harvesting, drying, sorting, grading takes usually a week each. However, the one stage where onions spend most time is during storage. A typical onion shed is meant to store onions up to 4-6 months.

Now, most of the losses are occurring in the ‘storage phase’ only. The losses can be in the form of reduction in net weight, fungal growth, degradation of onion bulb etc. and can be in the tune of up to 50%. Imagine an individual farmer, a trader or an exporter losing half of his crop during the storage phase alone!

A gap in coordination between the demand and the supply chain management exacerbates the problem. There are solutions like AgroNest – a smart onion warehouse developed by TATA Steel which mitigates the issue of losses during storage by maintaining the right levels of temperature/humidity and sends alerts in advance before spoilage occurs. This is a unique solution and is far more effective than storing onions in cold storage which spoils onion bulbs within hours of taking out of low temperatures because of temperature shock.

Lastly, until infrastructure, distribution and technology improve, and wastage is reduced, governments may find their fates depend on this pungent bulb and Indian shoppers will have plenty to cry about. Creating a credible buffer stock by investment in onion storage or processing facilities across the country is a way out and this is precisely where the challenge lies.

Posted on Jan 25, 2021.

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