India: Onion prices weaken despite lower arrivals as demand fails to support market

• Prices decline in six of seven tracked markets, Solapur logs sharpest drop
• Combined arrivals fall 18% w-o-w, but lower supply fails to support prices

India’s onion market remained under pressure during the week ended 2 October, despite a sharp decline in arrivals across the seven tracked markets. Combined arrivals fell to around 38,019 tonnes (t) from 46,297 t in the previous week, down 17.9% w-o-w. However, prices declined across six markets, while Ahilyanagar remained unchanged, indicating that reduced supply has yet to translate into stronger buying interest.

Prices weaken across major markets

Onion prices declined across most tracked markets during the week. Delhi prices fell 2.2% w-o-w to INR 4,762/qtl from INR 4,870/qtl, while Nashik prices declined 2.4% to INR 4,510/qtl from INR 4,620/qtl.
Vashi prices fell 3.6% to INR 4,457/qtl from INR 4,622/qtl, while Pune prices declined 1.9% to INR 4,587/qtl from INR 4,675/qtl. Indore recorded a sharper 4.5% decline to INR 3,910/qtl from INR 4,095/qtl.
Solapur registered the steepest decline among the tracked markets, with prices falling 6.5% w-o-w to INR 4,570/qtl from INR 4,890/qtl. Ahilyanagar was the only market where prices remained unchanged at INR 4,515/qtl.

Arrivals fall across all tracked markets

Arrivals declined across all seven tracked markets, with Pune and Indore recording the sharpest reductions. Delhi arrivals were broadly stable at 5,434.9 t compared with 5,440.9 t a week earlier. Ahilyanagar arrivals fell 45.6% to 6,168.1 t from 11,332.9 t, while Nashik arrivals declined 42.5% to 826.3 t from 1,437.7 t. Vashi arrivals fell 22.2% to 5,505.6 t from 7,079.8 t.

Pune arrivals dropped 60.7% to 1,751.4 t from 4,453.5 t, while Indore arrivals declined 54.1% to 8,865 t from 19,298.5 t. Solapur arrivals fell 18.7% to 9,467.5 t from 11,638.7 t. The broad-based decline in arrivals has tightened fresh market supply, but the simultaneous fall in prices points to weak demand. Buyers appear to be resisting higher price levels, limiting the market’s ability to respond to reduced arrivals.

Outlook

The onion market is likely to remain under pressure in the near term unless buying interest improves. The decline in prices across six of seven markets, despite a 17.9% w-o-w reduction in arrivals, suggests that demand remains insufficient to absorb available stocks at previous price levels.
Solapur and Indore will remain key markets to watch given their sharper price declines. A sustained recovery in prices would likely require stronger buying activity, while continued subdued demand could keep prices under pressure even if arrivals remain lower.