The Union government raised the procurement price of onions for the fifth time this season after buffer stock purchases remained well below the target, people familiar with the matter told HT. Government agencies have purchased only about 5,000 tonnes, or 2.5% of the 200,000 tonnes procurement target for 2026-27 so far, prompting the latest price revision to speed up purchases from farmers.
The purchase price has been raised to $2,125 per 100 kilograms of $1,875 per 100 kg, as of July 4. Since the start of purchases on June 1, the government has raised the purchase price five times, raising it by 67% of $12.70 per kilogram $21.25 per kilogram.
Buffer stock is maintained under the Price Stabilization Fund to enable calibrated market releases during the weak supply period between September and November and to contain price fluctuations.
The move comes even as industry participants say there is no immediate concern about onion availability and attribute the recent flatness in prices to speculative trading rather than any underlying shortage in supply.
According to the Ministry of Agriculture and Farmers’ Welfare’s second advance estimates for 2025-26, onion production stands at 30.7 million tonnes, largely unchanged from last year’s 30.8 million tonnes.
Prices rose at the benchmark Lasalgaon wholesale market in Maharashtra’s Nashik district $A local trader said: 1 per kilogram after notifying the government of the purchase price. Onion prices quoted in $He said 21-27 per kilogram on Saturday.
According to a statement issued by the Ministry of Consumer Affairs, onion stocks in Maharashtra, Madhya Pradesh and Gujarat remain adequate, with no indication of any onion shortage.
Daily mandi imports at the pan-India level remained strong at over 50,000 tonnes, with Maharashtra alone accounting for over 30,000 tonnes at an average conditional price of around $18 per kilogram, according to the government statement. Average retail price across India $He added: 31 per kilogram.
The ministry said lower than normal rainfall in some areas led to speculative buying, especially in Nashik and parts of Madhya Pradesh. “However, demand remains weak in key consumption centres, suggesting that buying is driven more by expectations of a future price recovery than by underlying demand,” the statement said.
While exports in June were normal at 150,000 tonnes, traders expect the pace of onion exports to slow down for a short period, mainly due to availability of fresh crops from Pakistan and China at competitive prices in major export destinations like Gulf countries, Sri Lanka and the Far East.
India, one of the world’s largest onion producers, grows between 28 and 30 million tons annually, and the rabe crop represents approximately 75% of the total production.
The purchase target varies each year depending on market conditions. The government has purchased 470,000 tonnes for buffer stock in 2024-25 and has started releasing onions from September to cool prices. Purchases were reduced to 300,000 tons the following year as supplies improved.
