Synopsis

Government hikes onion procurement price by 13% to Rs 2,125/quintal, effective July 4, 2026, to boost buffer stock purchases amid a slow start. This is the fifth increase this season, with only 2,000 tonnes procured so far. Despite production parity, seasonal price rises are expected, though overall availability remains stable. Speculative buying is noted due to delayed monsoons, while exports face competition from cheaper foreign produce.

The Centre has increased the procurement price of onions for buffer stock by 13% to Rs 2,125 per quintal from Rs 1,875 per quintal, marking its fifth price hike this season as it seeks to accelerate procurement and improve returns for farmers amid sluggish purchases.

The revised procurement price came into effect on July 4, 2026, according to an official statement.

The latest increase comes after onion procurement under the government's Price Stabilisation Fund (PSF) failed to gather pace despite multiple revisions in the purchase price. Since procurement began on June 1, the government has purchased only around 2,000 tonnes for its 2026 buffer stock.

The procurement price has been raised repeatedly over the past few weeks—from Rs 12.70 per kg at the start of the season to Rs 15.80 per kg on May 22, Rs 16.50 per kg on June 13, Rs 17.30 per kg on June 20, Rs 18.75 per kg thereafter, and now Rs 21.25 per kg, or Rs 2,125 per quintal.

Despite the slow procurement, the government said onion availability remains comfortable. According to the Second Advance Estimates of the Department of Agriculture & Farmers' Welfare for 2025-26, onion production is estimated at 307.37 lakh tonnes, nearly unchanged from 307.67 lakh tonnes produced in 2024-25.

The Consumer Affairs Ministry said there is no immediate concern over supplies, although retail prices could firm up in line with normal seasonal trends.

It said onion stocks in Maharashtra, Madhya Pradesh and Gujarat remain adequate, with no signs of shortages in stored produce. Daily arrivals across wholesale mandis continue to exceed 50,000 tonnes, including more than 30,000 tonnes from Maharashtra, where the average modal mandi price is around Rs 18 per kg.

The all-India average retail onion price currently stands at Rs 31 per kg. The ministry said higher-quality onions are still being held in storage and are expected to enter the market during the lean supply season.

Officials attributed recent speculative buying by some traders to delayed monsoon rains and below-normal rainfall in parts of the country, even though demand in major consumption centres remains subdued at prevailing prices. Production hubs such as Nashik in Maharashtra and parts of Madhya Pradesh have witnessed increased speculative activity driven by expectations of higher prices rather than actual demand.

On the export front, onion shipments remained steady at around 1.5 lakh tonnes in June. However, traders expect exports to slow in the coming months as fresh onion supplies from Pakistan and China become more competitive in key overseas markets, including the Gulf, Sri Lanka and the Far East.

The government also noted that Kharif onion sowing has been delayed by around 15 days in Maharashtra's Nashik region, while sowing progress in Karnataka's Chitradurga and Challakere belt is running at about 60% of normal.

(With inputs from PTI)