Govt raises onion procurement price by 13 per cent

The Centre on Saturday increased the procurement price of onions for the Price Stabilisation Buffer by 13 per cent, raising it from Rs1,875 per quintal to Rs2,125 per quintal with immediate effect. The revised rate, effective from July 4, is aimed at ensuring better returns for onion farmers while strengthening the government’s buffer stock procurement through NAFED and NCCF. According to the Ministry of Consumer Affairs, Food and Public Distribution, onion production for 2025-26 is estimated at 307.37 lakh metric tonnes (LMT), almost unchanged from 307.67 LMT in 2024-25, indicating that overall availability is sufficient. While prices are expected to rise gradually in line with seasonal trends, the government said there is no immediate concern over supply. Current onion stocks in Maharashtra, Madhya Pradesh and Gujarat remain adequate, with no indications of shortages in stored produce.
The ministry said daily onion arrivals across the country continue to remain robust at over 50,000 metric tonnes (MT), including more than 30,000 MT from Maharashtra, where the average modal mandi price is around Rs18 per kg. Better-quality onions are still in storage and are expected to enter the market during the lean season. The all-India average retail onion price currently stands at Rs31 per kg. It noted that the delayed arrival of the monsoon and below-normal rainfall in some regions has triggered speculative buying by a section of traders despite the absence of significant demand in major consumption centres. Production hubs such as Nashik in Maharashtra and parts of Madhya Pradesh are witnessing speculative trading driven largely by expectations of future price recovery rather than strong market demand.
The government also said onion exports remain normal, with around 1.50 lakh metric tonnes exported during June 2026. However, export momentum may slow temporarily as fresh onion crops from Pakistan and China are available at competitive prices in key overseas markets, including the Gulf countries, Sri Lanka and the Far East. On the sowing front, the ministry said Kharif onion sowing in Maharashtra’s Nashik region is running around 15 days behind schedule due to the delayed monsoon, while sowing in Karnataka’s Chitradurga and Challakere belt has reached about 60 per cent of the normal level.