Govt hikes onion procurement price by 13% to ₹2,125 per quintal

Ziraat Times Team Report

New Delhi, July 4: The Central Government has increased the procurement price of onions for the Price Stabilisation Buffer by 13 per cent, raising it from ₹1,875 to ₹2,125 per quintal with effect from July 4, in a move aimed at ensuring better returns for onion farmers while strengthening buffer stock procurement.

The revised procurement price will be implemented through the National Agricultural Cooperative Marketing Federation of India (NAFED) and the National Cooperative Consumers’ Federation (NCCF), which are currently procuring onions for the government’s Price Stabilisation Buffer.

According to the Department of Agriculture and Farmers’ Welfare’s Second Advance Estimates for 2025-26, onion production is projected at 307.37 lakh metric tonnes (LMT), almost unchanged from the previous year’s production of 307.67 LMT. The government said the estimates indicate that overall onion availability remains comfortable, although prices may witness the usual seasonal rise.

The government said current onion stocks in major producing states, including Maharashtra, Madhya Pradesh and Gujarat, remain adequate, with no indication of shortages in stored onions.

Daily arrivals in mandis across the country continue to exceed 50,000 metric tonnes, including more than 30,000 metric tonnes from Maharashtra, where the average modal price is around ₹18 per kilogram. Better-quality onions remain in storage and are expected to be released during the lean season. The all-India average retail price currently stands at ₹31 per kilogram.

The government noted that the delayed arrival of the monsoon and below-normal rainfall in some areas have triggered speculative buying by a section of traders. However, it said there is no significant increase in demand at prevailing price levels in major consumption centres.

It added that production hubs such as Nashik in Maharashtra and parts of Madhya Pradesh are witnessing speculative trading activity based largely on expectations of future price recovery rather than actual market demand.

On the export front, onion shipments remained normal, with around 1.50 lakh metric tonnes exported during June 2026. However, the government said traders expect exports to slow temporarily as fresh onion crops from Pakistan and China are available at competitive prices in key overseas markets, including Gulf countries, Sri Lanka and the Far East.

The government also noted that Kharif onion sowing in the Nashik region has been delayed by around 15 days, while sowing progress in Karnataka’s Chitradurga and Challakere belt has reached about 60 per cent of normal levels.