In countries like India, there are several reasons of vary in onion prices. Before mentioning those reasons, let's understand the basic principle of it.
Onion farming profit depends on quality of onions, yield, and the demand of onions in market. If onion is enough in market then profit will be little lesser and vice versa.
In India, every year hundreds of quintals of onions waste because of storage and management lack.
To understand the onion yield in a hectare land, first you have to understand structure and project of cultivation.
Onion farming yield per hectare
Let's understand how this number can calculate or report direct from the cultivation side.
Configuration of onion plants
Line to line, plant distance must be near 25 to 30 cm, plant to plant distance must be 20 cm. Thus, per square meter area, there will be 15 onion plants. So, per hectare, there will be 150000 onion plants.
Yield and produced onion weight per plant
The size of onions yield depends on the type of sowing seed. There are differences in yield size and weight according to the type of seed.
Average, one healthy onion plant produces 80 gm size and weight of onion(the green portion not included).
In one square meter area, 15x80=1200 gram of onions. So, per hectare, the total yield of onions will be 100 to 120 quintals.
Onion farming investment per hectare
Onion farming investment mainly uses for the arrangement of seeds, quality compost and fertilizers, irrigation water, labor, and transportation.
- Seeds cost- $630
- Compost and fertilizers- $250
- Labor cost- $800/3 months
- Irrigation water- $125
- Transportation cost- $400
Total cost- $2,205
Fertilizers and labor costs can reduce if someone has animals(cattle) and if they can do the entire cultivation by their own hands.
Onion farming profit per hectare
In countries like India, Pakistan, China, Bangladesh, and Sri Lanka, onion prices vary throughout the year. Sometimes, they increase by 4 times, and sometimes they remain low.
To calculate the profit in onion farming yield per hectare, we have to take an average wholesale market value of onions per annum.
- 1 kg onions gross value- $1.2
- 1 quintal onions gross price- $120
- 100 quintals onions gross price- $12,000
- Green portion yield- $80
- Value of total green portion- $600
Hence to calculate net profit from gross revenue, we have to reduce investment from it.
- Net profit- $10475/cultivation
How onion prices can vary in the market?
According to people's demand, when onions are enough to fulfill their needs, then prices will not change easily. But in case of less supply or lack of onion stock storage, their market value increases rapidly, even 3 to 4 times normal prices.
Such variations in market prices, affect the financial growth of middle and lower and middle-class people.
Now, let's understand the following reasons, those affect onion prices in the market-
Lack of quality storage system
India produces more than they need for onions per annum but still, onion prices hike every year by 3 to 4 times.
In onion-wealthy states of India, still lack high-quality and modern storage systems to store onions for longer periods.
The most practical example of this lack is the rainy season, in which onions got bad insects and bad moisture to get destroyed.
In current storage systems, facilities for maintaining temperature and moisture are not so effective.
Because of the lack of a high-quality storage system for onions, every year, tons of onions waste. Thus, India produces enough onions per year but still, onion prices increase very high.
Low production
Yes, the low production of onions can affect the market price of onions. You can understand this by the simple principle of working in the market.
Because of low production, prices increase to maintain the market economy. This increase in the market price of onions, inversely proportional to the production of onions.
Hence, the following formulae can give an idea to get the point of price increase-
Increase in market price = market economy factor x 1/production per quarter.
Is onion farming profitable in India?
So, now we come to the point of onion farming cultivation. For people, who want to start an onion farm in a country like India, Is onion farming profitable in India?
Yes, there is no doubt that the onion farming business is profitable in India. But there are some important terms related to the percentage of profit. Onion farming yield can produce a decent profit margin on the total investment.
It is clear that in most of the chances, profit margin vary between 4 times to 6 times of the total investment. It means profit margin will be proportional to the direct investment.
But still, i want you to read the following points before getting start of onion farming-
- After sowing, you will not get any other mixed crop with onion plants. In case of unfortunate natural disaster, low production or insect attacks, you will not have backup. So, if you don't have experience of farming before, then the uncertainty of profit and loss remain with you.
- You can't be so accurate in starting with your investment, because there are tiny but multiple expenses.
- If you are going to have an onion farm in less land than half of an acre, and your daily life is directly dependent on the same income then you should not waste your time and money on onion farming. You can do it if you have parental land and life is not dependent on this cultivation.