The government has increased the purchase price of onion by 13% for buffer stock. It has been increased from Rs 1,875 per quintal to Rs 2,125 per quintal. Its objective is to increase procurement and provide better prices to farmers. According to the government statement, the new rates have come into effect from 4th July 2026 i.e. today. This is the fifth increase in the procurement price this season, as the government’s onion procurement for the buffer stock of 2026 under the ‘Price Stabilization Fund’ had a slow start. Despite repeated increases in the procurement price, only 2,000 tonnes of onion has been purchased since June 1.
The purchase price has increased rapidly since the start of the season. Earlier the price was Rs 12.70 per kg, which was increased to Rs 15.80 per kg on May 22. After this, it was increased to Rs 16.50 per kg on June 13, Rs 17.30 per kg on June 20 and then Rs 18.75 per kg. Now it has been increased to Rs 21.25 per kg i.e. Rs 2,125 per quintal. According to the second advance estimate of 2025-26 of the Department of Agriculture and Farmers Welfare, onion production is estimated to be 307.37 lakh tonnes, which is almost equal to the production of 307.67 lakh tonnes in 2024-25.
There is no shortage of onions
The Ministry of Consumer Affairs said that at present there is no concern about the total supply, although like every year, there may be a slight increase in prices due to seasonal trends. Stock levels in Maharashtra, Madhya Pradesh and Gujarat remain adequate and there is no sign of any shortage in stored onions. Daily arrival of more than 50,000 tonnes of onion was recorded in mandis across the country, of which Maharashtra alone’s share was more than 30,000 tonnes. During this period the average model price was around Rs 18 per kg. Whereas the average retail price across the country is Rs 31 per kg.
Better quality onion is still being kept in storage and it is expected that it will be launched in the market in times of less supply. Due to delay in monsoon and below normal rainfall in some areas, some traders have started buying on speculative basis, while at current prices the actual demand in major consuming areas still remains weak. Production centers like Nashik and parts of Madhya Pradesh are witnessing speculative trading, based on expectations of rising prices rather than actual demand. Onion export remained normal in June and about 1.50 lakh tonnes of onion was sent abroad during the month. However, traders are hopeful that the pace of exports may slow down in the coming times, because cheap new crops from Pakistan and China are giving tough competition to Indian onions in big markets like Gulf countries, Sri Lanka and the Far East. Meanwhile, Kharif sowing has been delayed by about 15 days in Nashik area of Maharashtra, while in Chitradurga and Challakere belt of Karnataka, sowing work has been done only to about 60 percent of the normal level.
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