The Indian government has raised the procurement price of onions for buffer stock purposes by 13% to ₹2,125 per quintal (₹21.25/kg), effective July 4, 2026, according to an official statement reported by PTI. This marks the fifth upward revision this season as the government's onion buying under the Price Stabilisation Fund has got off to a slow start, with only around 2,000 tonnes procured since June 1 despite repeated hikes.
Price Revisions and Slow Procurement
The procurement price has climbed in quick succession since the season opened. Below is the timeline of revisions:
| Effective Date | Price (₹/kg) | Price (₹/quintal) |
|---|---|---|
| Season opening | 12.70 | 1,270 |
| May 22, 2026 | 15.80 | 1,580 |
| June 13, 2026 | 16.50 | 1,650 |
| June 20, 2026 | 17.30 | 1,730 |
| Later (date not specified) | 18.75 | 1,875 |
| July 4, 2026 | 21.25 | 2,125 |
Despite these increases, only about 2,000 tonnes have been procured since June 1, indicating farmer reluctance or better market prices.
Supply Fundamentals and Inventory
According to the Second Advance Estimates of the Department of Agriculture & Farmers' Welfare for 2025-26, onion production is pegged at 307.37 lakh tonnes, broadly on par with 307.67 lakh tonnes in 2024-25. The consumer affairs ministry said overall availability is not a concern at this stage, 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 tonnes, with Maharashtra alone accounting for more than 30,000 tonnes at an average modal price of about ₹18/kg. The all-India average retail price stands at ₹31/kg. Better-quality stocks continue to be held back in storage and are expected to be released during the lean period.
Demand and Trade Dynamics
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 tonnes 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.
Weather and Sowing Impact
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. This could affect upcoming supplies, but the government remains confident in adequate buffer stocks.
Sources:
