Govt raises onion procurement price by 13% to Rs 2,125 per quintal from July 04

06 Jul 2026 Evaluate

In order to ensure better returns for onion farmers while supporting buffer stock procurement, the government has increased the procurement price of onions for the Price Stabilisation Buffer by 13%, from Rs 1,875 per quintal to Rs 2,125 per quintal, effective July 4, 2026. Procurement of onions through National Agricultural Cooperative Marketing Federation of India (NAFED) and National Cooperative Consumers' Federation of India (NCCF) for the Government's Price Stabilisation Buffer is currently underway.

As per the Second Advance Estimates of the Department of Agriculture & Farmers' Welfare for 2025-26, onion production is estimated at 307.37 lakh metric tonnes (LMT), which is slightly lower compared to the production of 307.67 LMT in 2024-25. Going by the production estimates, the overall availability of onions is not a concern at this stage, though prices may be expected to inch up in line with the normal price seasonality.

Current stock levels in Maharashtra, Madhya Pradesh and Gujarat are adequate. At present, there are no indications of any shortage of stored onions. Daily mandi arrivals at the all-India level remain robust at over 50,000 metric tonnes (MT), while arrivals in Maharashtra are over 30,000 MT, with average modal prices of about Rs 18 per kg. Better-quality stocks continue to remain in storage and are likely to be released during the lean period. The all-India average retail price is Rs 31 per kg.

The delay in monsoon arrival and lower-than-normal rainfall in some regions has led to speculative buying by a section of traders, though there is no significant demand at the prevailing price levels in major consuming centres. Despite the sentiment in consumer markets, production centres such as Nashik and parts of Madhya Pradesh are witnessing a tendency for speculative trading activity, largely on expectations of a future market recovery rather than on strong underlying demand.

Onion exports are normal, with about 1.50 LMT exported during June 2026. However, traders expect that the pace of onion exports may slow down for a short duration, primarily because fresh crops from Pakistan and China are available at competitive rates in key export destinations such as the Gulf countries, Sri Lanka and the Far East. While the Nashik region of Maharashtra has reported about a 15-day delay in Kharif sowing, the sowing progress in the Chitradurga and Challakere belt of Karnataka is estimated to be around 60 per cent of normal.

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