The government has increased the procurement price of onions for buffer stock purposes by 13%, from Rs 1,875 per quintal to Rs 2,125 per quintal, effective July 4, 2026, according to an official statement. This is the fifth upward revision this season, aimed at boosting procurement and ensuring better returns for farmers under the Price Stabilisation Fund.
Slow procurement despite repeated hikes
Only about 2,000 tonne of onions have been procured since June 1, despite the repeated price increases. The procurement price has risen rapidly since the season opened: from Rs 12.70/kg to Rs 15.80/kg on May 22, then to Rs 16.50/kg on June 13, Rs 17.30/kg on June 20, Rs 18.75/kg, and now to Rs 21.25/kg (Rs 2,125/quintal).
Production and availability outlook
According to the Second Advance Estimates of the Department of Agriculture & Farmers’ Welfare for 2025-26, onion production is pegged at 307.37 lakh tonne, broadly on par with 307.67 lakh tonne in 2024-25. The consumer affairs ministry stated that overall availability is not a concern, though prices may inch up in line with normal seasonal trends.
Stock levels in Maharashtra, Madhya Pradesh and Gujarat remain adequate, with no indication of shortages in stored onions. Daily mandi arrivals at the all-India level stayed robust at over 50,000 tonne, with Maharashtra alone accounting for more than 30,000 tonne at an average modal price of about Rs 18/kg. The all-India average retail price stands at Rs 31/kg. Better-quality stocks continue to be held back in storage and are expected to be released during the lean period.
Speculative trading and export trends
A delayed monsoon and below-normal rainfall in some regions have triggered speculative buying by a section of traders, even though actual demand in major consuming centres remains muted at current price levels. Production hubs such as Nashik and parts of Madhya Pradesh are seeing speculative trading activity, driven more by expectations of a price recovery than by real demand.
Onion exports remained normal in June, with about 1.50 lakh tonne shipped out during the month. However, traders expect export momentum to ease in the near term, as cheaper fresh crops from Pakistan and China are undercutting Indian onions in key markets such as the Gulf, Sri Lanka and the Far East.
Kharif sowing delays
Kharif sowing has been delayed by about 15 days in Maharashtra’s Nashik region, while progress in Karnataka’s Chitradurga and Challakere belt is running at around 60% of normal.
