Delhi is the most affected city by the surge in Onion’s wholesale price amongst India’s eight major metros cities. It was found that retailers increase the price quicker once wholesale price increase against decreasing the prices when wholesale price drops.
According to the analysis done by a major news portal, even when the prices of onions dropped from Rs. 20.75 to Rs.18 in Delhi, retailers kept their margins over 100% from 1st of September to 5th of September 2019. The average retail price of onions in Delhi was Rs. 40/kg up until 15th of September.
Price comparison among the metro cities.
For Ahmedabad, Kolkata, Pune, and Bengaluru the mark-up was under 30%, for Hyderabad it was between 17%-80%, in Mumbai it ranged between 45%-48% whereas in Chennai it was between 20%-70%.
Between 15th and 16th September wholesale prices in Delhi rose by Rs. 8.5/kg, this sudden increase in the wholesale price decreased the margin of the retailers, in the next two days. On 18th September Delhi’s onion prices skyrocketed to Rs. 52 from Rs. 43 on 15th September. Up until 28th of September, average price on onions in Delhi was Rs. 58/kg, where average margin of retailers was Rs. 23/kg. Higher margins which higher wholesale price.
In Pune, onion prices were affected between 19th and 23rd September, when the wholesale price touched Rs. 36.33/kg. Before the price hike, the average margin of retailers were mere Rs. 1.6/kg, having said that, since the time price hiked margin rose to Rs. 7.7/kg. Ahmedabad is the only city where the retailer sold onions at a constant margin of Rs.2/kg, funny enough people are saying Gujaratis not eating onions is the reason behind it.
Mumbai saw the climb in onion prices between 19th and 21st of September, where the wholesale price rose to Rs.44.5/kg from Rs. 33.5/kg, before the price hike, the average margin bagged by the retailers was Rs. 11.6/kg, whereas, in the week after the price hike their margin rose to Rs. 18.5/kg with the retail price being Rs. 41/kg and Rs. 58/kg respectively. Rest of the metros saw similar pattern, Bengaluru’s wholesale onion price dropped to Rs. 40/kg on 25th of September from Rs. 44/kg on 23rd of September, whereas the retail price of Rs. 48/kg did not change. Likewise, in Chennai, the wholesale onion prices dropped to Rs. 24/kg from Rs. 35/kg, however the retail price did not change from Rs. 37/kg.