Govt raises onion buffer procurement price by 13% to support farmers

Procurement price increased to ₹2,125 a quintal to improve farmer returns, while government says onion supplies remain adequate despite recent firmness in prices

The Centre has raised the procurement price of onions for buffer stocking by 13.3 per cent to ₹2,125 a quintal from ₹1,875, a move expected to help farmers secure better returns for their produce.

 

The revised procurement price came into effect on July 4, even as procurement by the National Agricultural Cooperative Marketing Federation of India (NAFED) and the National Cooperative Consumers' Federation (NCCF) is under way at several centres.

 

In a statement, the government said onion production in 2025-26 is estimated at 30.74 million tonnes (mt), almost unchanged from 30.77 mt in the previous year, indicating that overall supplies remain adequate despite the recent increase in prices.

   

It added that onion stocks in the key producing states of Maharashtra, Madhya Pradesh and Gujarat remain sufficient, with no indication of any shortage of stored onions.

 

Daily arrivals in wholesale markets across the country continue to exceed 50,000 tonnes, including more than 30,000 tonnes in Maharashtra, where the average modal price is around ₹18 per kg. The all-India average retail price stands at about ₹31 per kg.

 

According to the statement, higher-quality onion stocks remain in storage and are expected to be released during the lean season, helping moderate prices.

 

The Centre attributed the recent firmness in market sentiment to the delayed onset of the southwest monsoon and deficient rainfall in some regions, which it said had triggered speculative buying by a section of traders.

 

However, it said demand remains subdued at prevailing prices in major consumption centres.

 

Production hubs such as Nashik in Maharashtra and parts of Madhya Pradesh have witnessed speculative trading based on expectations of future price recovery rather than strong underlying demand, the statement added.

 

On exports, the government said overseas shipments remained normal at about 0.15 mt in June.

 

However, exports could slow temporarily as fresh onion supplies from Pakistan and China are available at more competitive prices in key markets, including the Gulf, Sri Lanka and the Far East.

 

On the crop front, the government said kharif onion sowing has been delayed by around 15 days in Nashik because of the late arrival of the southwest monsoon. In Karnataka's Chitradurga and Challakere belt, sowing has reached around 60 per cent of the normal level.