Government Raises Onion Procurement Price by 13% to Support Farmers and Strengthen Buffer Stock

The Government has increased the procurement price of onions for the Price Stabilisation Buffer by 13 percent, raising it from ₹1,875 per quintal to ₹2,125 per quintal. The revised price has come into effect from 4 July 2026 and is aimed at ensuring better returns for onion farmers while strengthening the country’s buffer procurement mechanism.

Procurement of onions is currently being carried out through NAFED and NCCF for the Government’s Price Stabilisation Buffer. The higher procurement price is expected to give farmers improved price realisation and encourage smooth procurement for maintaining adequate reserves during the lean season.

According to the Second Advance Estimates of the Department of Agriculture and Farmers’ Welfare for 2025–26, onion production is estimated at 307.37 lakh metric tonnes. This is almost at the same level as the 307.67 lakh metric tonnes recorded in 2024–25. Based on these estimates, the overall availability of onions remains comfortable, although prices may rise gradually in line with the usual seasonal trend.

Current onion stocks in key producing states such as Maharashtra, Madhya Pradesh and Gujarat are reported to be adequate. The Government has stated that there are no present indications of any shortage of stored onions.

Daily mandi arrivals across the country remain strong at more than 50,000 metric tonnes. Maharashtra alone is recording arrivals of over 30,000 metric tonnes, with average modal prices at around ₹18 per kg. Better-quality stocks are still being held in storage and are expected to be released during the lean period. At present, the all-India average retail price of onions stands at ₹31 per kg.

The delay in monsoon arrival and below-normal rainfall in some regions has encouraged speculative buying by a section of traders. However, major consuming centres are not witnessing significant demand at current price levels. In production centres such as Nashik and parts of Madhya Pradesh, speculative activity is being driven more by expectations of future price recovery than by strong immediate demand.

Onion exports remain normal, with around 1.50 lakh metric tonnes exported during June 2026. Traders, however, expect the pace of exports to slow temporarily as fresh crops from Pakistan and China are available at competitive prices in key export markets such as the Gulf countries, Sri Lanka and the Far East.

In Maharashtra’s Nashik region, Kharif sowing has been delayed by around 15 days. In Karnataka’s Chitradurga and Challakere belt, sowing progress is estimated at nearly 60 percent of the normal level.

The increase in onion procurement price reflects the Government’s effort to balance farmer welfare, market stability and consumer interest. By offering a higher procurement rate, strengthening buffer stocks and monitoring market arrivals, the move is expected to support onion growers while helping manage price stability during the coming months.

Source: PIB