The Indian government has increased the procurement price of onions under the Price Stabilisation Buffer by 13 percent, from Rs 1,875 per quintal to Rs 2,125 per quintal, effective from July 4, 2026, according to the Ministry of Consumer Affairs, Food & Public Distribution.
Revised procurement price and farmer benefits
The revised rate aims to provide better returns to onion farmers while supporting the government's buffer stock procurement efforts. Procurement is being carried out through the National Agricultural Cooperative Marketing Federation of India (NAFED) and the National Cooperative Consumers' Federation of India (NCCF).
Onion production estimates for 2025-26
As per the Second Advance Estimates of the Department of Agriculture & Farmers' Welfare for 2025-26, onion production is estimated at 307.37 lakh metric tonnes (LMT), comparable to the 307.67 LMT produced in 2024-25. The ministry stated that overall onion availability is not a concern at this stage, though prices may inch up in line with normal seasonality.
Current stock and market conditions
Current stock levels in Maharashtra, Madhya Pradesh, and Gujarat are adequate, with no indications of any shortage of stored onions. Daily mandi arrivals at the all-India level remain robust at over 50,000 metric tonnes (MT), while arrivals in Maharashtra exceed 30,000 MT, with average modal prices of about Rs 18 per kg. Better-quality stocks continue to be stored and are expected to be released during the lean period. The all-India average retail price stands at Rs 31 per kg.
Impact of monsoon delay and speculative trading
The ministry noted that a delay in monsoon arrival and lower-than-normal rainfall in some regions have led to speculative buying by a section of traders, although there is no significant demand at prevailing price levels in major consuming centres. Production centres such as Nashik and parts of Madhya Pradesh are witnessing speculative trading activity, largely driven by expectations of future market recovery rather than strong underlying demand.
Export dynamics and competition
Onion exports are normal, with about 1.50 LMT exported during June 2026. However, traders expect the pace of onion exports may slow down for a short duration, primarily because fresh crops from Pakistan and China are available at competitive rates in key export destinations such as Gulf countries, Sri Lanka, and the Far East.
Kharif sowing progress
The Nashik region of Maharashtra has reported about a 15-day delay in Kharif sowing, while sowing progress in the Chitradurga and Challakere belt of Karnataka is estimated to be around 60 percent of normal.
