Onion Storage, Grading and FPO Sale Timing in Nashik
An FPO in Nashik has 20 t of rabi onion harvested on 15 March. About 30% of bulbs are below 40 mm; the rest are 45–55 mm. The farmgate price is ₹11/kg. The FPO can sell now, or store until August when the expected price is ₹26/kg. Two storage options exist: a ventilated shed with three-tier bamboo racks, estimated 12% loss and ₹1.8/kg storage cost; or a traditional 1 m heap on the floor, 25% loss and ₹0.8/kg cost. A processor offers to buy 5 t now at ₹13/kg for dehydration, but only if bulbs are 45 mm or larger and sulphur content is acceptable. The FPO needs cash for the next kharif season and can borrow at 12% annual interest.
1. Calculate net returns for selling now, shed storage and heap storage, and recommend an option with a break-even check.
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Sell now: 20,000 × ₹11 = ₹2,20,000. Shed: 12% loss leaves 17,600 kg; revenue 17,600 × ₹26 = ₹4,57,600; storage cost 20,000 × ₹1.8 = ₹36,000; interest on ₹2.2 lakh for five months at 12% ≈ ₹11,000; net ≈ ₹4,10,600. Heap: 25% loss leaves 15,000 kg; revenue 15,000 × ₹26 = ₹3,90,000; cost ₹16,000; interest ₹11,000; net ≈ ₹3,63,000. The shed is best. Break-even August price for the shed = (2,20,000 + 36,000 + 11,000) ÷ 17,600 ≈ ₹15.2/kg. If the August price stays above ₹15.2, storage beats selling now. Even if 30% small bulbs fetch 20% less, shed storage still clearly beats the harvest sale.
2. What pre-storage and storage practices would you use to keep losses near 12%?
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Stop irrigation 15–20 days before harvest and avoid late nitrogen. Cure bulbs in shade for 3–5 days, not in direct sun; cut the neck about 2 cm above the bulb and discard damaged, thick-necked and rotted bulbs. Grade before storage and keep small bulbs separate. Store in thin layers on racks with good ventilation rather than in a deep heap; maintain cool, dry conditions and inspect fortnightly. Where permitted, maleic hydrazide at about 2,500 ppm applied 2–3 weeks before harvest reduces sprouting. Never mix new and old stock. These practices target the two main losses - sprouting and neck rot - and make the 12% assumption realistic rather than optimistic.
3. Should the FPO accept the processor’s offer for 5 t at ₹13/kg? Consider grade, cash and value addition.
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The processor pays ₹13/kg for 5 t = ₹65,000, only ₹2/kg above the harvest price. The same 5 t stored in the shed would give about 4.4 t saleable × ₹26 = ₹1,14,400, less storage and interest of about ₹11,750, net ≈ ₹1,02,650 - far more if the price holds. The offer is below the shed break-even of ₹15.2/kg, so it is not attractive for good 45 mm+ bulbs. It can make sense for bulbs that are already damaged or if the FPO cannot finance storage. Since the processor rejects bulbs below 45 mm, sell the 30% small grade separately now. Value addition by dehydration gives roughly 10–12% recovery, but the FPO should not invest without a confirmed buyer and a sulphur check.