Reply #12: Did middlemen gain when onions touched Rs70-80/kg?

[Fire Walk With Me]

Onion prices have more than doubled in the past year, touching a peak of Rs75-80/kg. This prompted us to explore the drivers of this phenomenon and get a better sense of the ground realities.

In December, the price of onions at Lasalgaon touched Rs60/kg as (albeit very briefly, as the average price of red onions was Rs20/kg in December). When prices hit Rs60/kg at the farmer’s level, the retailer was forced to sell at Rs70-80/kg to retain his profit levels.

We believe hoarding, if at all, would have occurred at this time. When prices of onions stablised at about Rs20/kg, middlemen/retailers could have gained by holding on to the same prices in the pretext of high input prices. However, in the absence of concrete data, this remains a hypothesis.

http://www.dnaindia.com/money/report_why-are-onions-so-expensive_1496733