Running rings around onion

Pointing to low production this year,Balasaheb Darade says don’t call us hoarders without taking into account ground realities.


EVERY time onion prices spiral up,traders in Lasalgaon—often called Asia’s largest onion market—are dubbed villains in an insidious plot to put the otherwise humble commodity out of reach of the common man. That’s about the only time Lasalgaon,a village of around 15,000 people,located about 60 km from Nashik,makes news.

Among the 40-odd traders operating in the Shri Chhatrapati Shivaji Agriculture Produce Market Committee (APMC) of Lasalgaon,which exclusively deals in onion trade,Balasaheb Darade is bewildered at how the fate of even distant governments comes to rest on his bulbous produce. According to him,that’s because of the entirely baseless media portrayal of them as hoarders, without taking into account either trade mechanisms or the marketing chain.

Claiming that production has been low this year due to drought,the 30-year-old says: It is a business like any other. We buy the produce from growers and sell it to traders across the country keeping a certain profit. Depending on the market behaviour we sometimes make profit and there are also days when we lose money. While certain amount of produce is stored like in any other trade—the allegation of hoarding of huge quantities is baseless. If production is lower,the prices are bound to increase.

As per state government estimates,there has been a 40 per cent drop in market arrivals between April and July at Lasalgaon. While in 2012,the four months saw arrival of 12,58,995 quintals,in 2013,the same period saw just 7,51,833 quintals.

Unlike other agriculture markets which open very early in the morning—almost at the break of dawn—Lasalgaon traders such as Darade start their day late. The market here opens at 9 am.

“In the onion trade you have to be very careful about the quality of the produce. During day time you can inspect the produce thoroughly,” says Darade,who gets up at 7 am and has a quick bite and tea before he reaches the market, 2 km away, by 8-8.30 am.

Before the market opens,Darade speaks to buyers in markets such as Delhi, Kolkata, Bhopal to confirm the demand. “Based on their demand,I go around the marketplace inspecting the produce and placing bets in auctions. The morning session ends at 12 pm. The market resumes again at 3 pm and closes at 6 pm. Remaining in contact with prospective buyers is most important part of the business,” he says.

They can only flourish if traders even far away associate their name with good quality, Darade underlines.

On any given day, he can be seen among the reddish-brown heaps Lasalgaon traders do not deal with produce in gunny bags inspecting the onions closely. We traditionally deal with loose onions. The grower has to empty his truck in front of us. It makes quality control easier,you can check the produce thoroughly and it reduces the chances of a farmer selling you spoiled onions hidden at the bottom of gunny bags, says the trader. No other onion be it from Karnataka, China or Pakistan can rival the Nashik varieties in taste, size and colour. But you have to make sure that you only supply best of the best to do good in the long run.

On an average,the Lasalgaon market receives 8,000-10,000 quintals of onion everyday. This is down to 5,500 to 6,000 quintals this season.

Darade has been in the business for 13 years,having inherited it from his father. “My father worked in another trader’s shop for decades as an employee. Later he set up his own shop in the APMC. I studied in a local college till Class XII and then dropped out to help him in the business. For the past five-six years,I have taken over entirely,” says the father of a two-year-old daughter.

There is another reason the accusations of hoarding large quantities don’t hold water,Darade says. During periods of supply shortage,the marketing board vigilance is so strict that it is impossible to hoard big amounts illegally. “This year several traders had stored onions,which were bought from farmers in April-May during the harvest glut, at Rs 1,000 per quintal. However,when the prices started climbing up in July and reached Rs 1,500 per quintal,most of the stored produce was sold off at a profit of Rs 500 per quintal. We had not imagined that the prices would go as high as Rs 4,500. At present,we are buying and selling onions at a margin of Rs 50 to 100 per quintal. The APMC administration checks the total buying,total selling and storage on a daily basis and sends a report to Mumbai,” he says.

Storing also comes with its own costs as well as the ever-present risk of prices falling. “You have to pay the rent of godowns and there is a 15-20 per cent weight loss of produce due to evaporation. There have been years when we had to sell a produce which was bought at

Rs 1,000 per quintal at Rs 800. You can’t store the produce longer,for onions get spoiled, Darade says. Even if you take utmost care and make sure that not a single onion rots, you lose 20 per cent of produce weight to evapo-transpiration in a couple of months. There’s no way you can escape it in the hot weather.

Giving a more recent example, he points to a pile of onions lying in his shed. “I bought two truckloads of this (400 quintals) on August 14 at a price of Rs 4,500 per quintal. The next day was Independence Day and by the morning of August 16,when the market reopened,the prices had collapsed by Rs 1,000 per quintal to Rs 3,500 due to news of banning of exports and imports from China and Pakistan. In the past few days,the prices have further come down and now I will have to sell this produce at a net loss of about Rs 1,000 to 1,200 per quintal. Such is this business,” he says.

After getting home from work,Darade likes to spend some time with family,which mostly involves business discussions with father and taking strategic decisions on investment. “Before going to sleep I spend some time with my daughter and watch TV. I like comedy shows and Hindi films,” he says.

The tears shed over onion daily on news channels don’t escape his attention, but Darade is not disheartened. Irrespective of the highs and lows,I will stick to onions because it is the business of onion which has not only sustained my family but the entire region for decades,” he says.

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