The Indian government has raised the onion procurement price by 13% to Rs 2,125 per quintal (from Rs 1,875 per quintal), effective July 4, 2026, according to an official announcement reported by Business-Today. The revision aims to improve farmer realisations and step up procurement under the Price Stabilisation Fund, which has remained sluggish this season. Despite five consecutive price increases since procurement began on June 1, only about 2,000 tonnes of onions have been added to the 2026 buffer stock so far.
Procurement Challenges and Price Revisions
The procurement rate has been revised upward five times this season. The following table shows the progression:
| Effective Date | Price (Rs per kg) | Price (Rs per quintal) |
|---|---|---|
| June 1 start | 12.70 | 1,270 |
| May 22 | 15.80 | 1,580 |
| June 13 | 16.50 | 1,650 |
| June 20 | 17.30 | 1,730 |
| Thereafter | 18.75 | 1,875 |
| July 4 | 21.25 | 2,125 |
According to Business-Today, the sluggish procurement is not indicative of a shortage. The Consumer Affairs Ministry stated that stocks held in Maharashtra, Madhya Pradesh, and Gujarat remain adequate, with no indication of shortages in stored onions. Wholesale arrivals have remained steady, with mandis across the country receiving more than 50,000 tonnes of onions daily, and Maharashtra alone contributing over 30,000 tonnes at an average modal price of around Rs 18 per kg. The all-India average retail price currently stands at Rs 31 per kg.
Market Fundamentals: Supply and Demand
Better-quality onions continue to remain in storage and are expected to be released during the lean season, according to the ministry. However, delayed monsoon rains and below-normal rainfall in some regions have encouraged speculative buying by a section of traders. Such speculative activity has been particularly visible in production centres such as Nashik and parts of Madhya Pradesh, where trading has been driven more by expectations of a price recovery than by actual demand, the ministry noted. Actual demand in key consuming centres remains subdued at current prices.
Onion production for 2025-26 is estimated at 307.37 lakh tonnes, according to the Second Advance Estimates of the Department of Agriculture & Farmers' Welfare — almost unchanged from the previous year's output of 307.67 lakh tonnes. Exports remained stable during June at about 1.50 lakh tonnes, but traders expect export demand to soften in the coming weeks as fresh onion supplies from Pakistan and China are being offered at lower prices in markets such as the Gulf, Sri Lanka, and the Far East.
Sowing Outlook and Delays
On the sowing front, kharif onion planting has been delayed by around 15 days in Maharashtra's Nashik region. In Karnataka, sowing in the Chitradurga and Challakere belt has progressed to nearly 60% of the normal level. The delayed sowing, combined with speculative trading, could influence supply dynamics in the coming months, though the government maintains that overall availability is adequate.
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