Centre Hikes Onion Procurement Price 13% To Boost Buffer Stock Procurement

The Central government has increased the procurement price of onions for its buffer stock by 13 percent to ₹2,125 per quintal from ₹1,875 per quintal, marking the fifth revision this season.

The new rate became effective from July 4, 2026, according to an official statement.

The move is aimed at accelerating procurement under the Price Stabilisation Fund (PSF) and improving participation from farmers amid sluggish procurement levels.

Despite multiple price revisions over recent weeks, onion procurement has remained slow. Since the beginning of the procurement cycle on June 1, the government has managed to purchase only about 2,000 tonnes for the 2026 buffer stock.

Earlier revisions saw the procurement price increase progressively from ₹12.70 per kg at the start of the season to ₹15.80 on May 22, ₹16.50 on June 13, ₹17.30 on June 20, ₹18.75 subsequently, and now ₹21.25 per kg.

Even with limited procurement, the government has maintained that onion availability in the country remains comfortable.

As per the Department of Agriculture & Farmers’ Welfare’s Second Advance Estimates for 2025–26, onion production is projected at 307.37 lakh tonnes, broadly stable compared to 307.67 lakh tonnes in the previous year.

The Consumer Affairs Ministry has stated that there is no immediate supply concern. It added that onion stocks in key producing states such as Maharashtra, Madhya Pradesh and Gujarat remain sufficient, with no indication of shortages in storage.

Wholesale mandis are receiving over 50,000 tonnes daily, including more than 30,000 tonnes from Maharashtra, where modal prices hover around ₹18 per kg.

The average retail price of onions across India is currently around ₹31 per kg. Authorities noted that higher-quality stored onions are expected to enter the market during the lean season, helping stabilise prices.

Officials also attributed some recent price volatility to speculative trading activity, driven by delayed monsoon progress and uneven rainfall in parts of the country, rather than strong demand.

Key production centres such as Nashik and parts of Madhya Pradesh have reportedly seen increased speculation based on expectations of future price rises.

On the trade front, onion exports stood steady at around 1.5 lakh tonnes in June.

However, exporters expect a slowdown in coming months as supplies from Pakistan and China gain competitiveness in global markets such as the Gulf, Sri Lanka and the Far East.

Additionally, the government noted delays in Kharif onion sowing, with Maharashtra’s Nashik region lagging by around 15 days and Karnataka’s Chitradurga-Challakere belt operating at about 60 percent of normal sowing levels.