There is welcome news for onion growers. The government has raised the price at which it buys onions for its buffer stock by a sharp 13 percent, taking it to Rs 2,125 per quintal from the earlier Rs 1,875 per quintal. According to an official statement, these new procurement rates will come into force from July 4, 2026. The move is aimed squarely at boosting purchases and putting a better return in farmers' pockets.
Fifth Hike in a Single Season
What stands out is that this is the fifth increase in the procurement price during the current season. The government's onion buying for the 2026 buffer stock under the Price Stabilisation Fund has been sluggish. Despite repeated price hikes, only 2,000 tonnes of onion have been purchased between June 1 and now.
How the Rate Climbed, Step by Step
The procurement price has been on a steady upward march since the season began. It started at Rs 12.70 per kg and rose to Rs 15.80 per kg on May 22. From there it moved to Rs 16.50 per kg on June 13 and Rs 17.30 per kg on June 20, before touching Rs 18.75 per kg. It has now been pushed all the way to Rs 21.25 per kg, which works out to Rs 2,125 per quintal.
Production Seen at 307.37 Lakh Tonnes
As per the second advance estimate of the Department of Agriculture and Farmers Welfare for 2025-26, onion production is projected at 307.37 lakh tonnes. That figure is almost on par with the 307.67 lakh tonnes of 2024-25. The Ministry of Consumer Affairs said overall availability is not a concern at the moment. Prices, however, could edge up a little in line with the usual seasonal trend.
No Shortage in Storage
Stock levels in Maharashtra, Madhya Pradesh and Gujarat remain comfortable, with no sign of a dip in the stored quantities. Daily arrivals in mandis across the country have stayed above 50,000 tonnes. Of this, Maharashtra alone accounts for more than 30,000 tonnes, where the average modal price is running at roughly Rs 18 per kg. The all-India average retail price stands at Rs 31 per kg.
Better Quality Stock Still Held Back
Superior quality onions are still being kept in storage, and the expectation is that they will be released into the market when supply runs tight. A delayed monsoon and below-normal rainfall in some regions have prompted a few traders to start buying for speculation. Even so, actual demand at the major consumption centres remains weak at prevailing prices.
1.5 Lakh Tonnes Exported in June
Speculative trading activity is being seen at production hubs such as Nasik and parts of Madhya Pradesh. Onion exports in June were normal, with about 1.50 lakh tonnes shipped out during the month. Traders, however, believe the pace of exports could slow soon. The reason is that cheaper, fresh crops from Pakistan and China are giving Indian onions stiff competition in key markets like the Gulf countries, Sri Lanka and the Far East.
