Government Raises Onion Procurement Price to Support Farmers

In a recent announcement, the Indian government has increased the procurement price of onions by 13%, now set at Rs 2,125 per quintal. This decision aims to enhance the financial returns for onion farmers and strengthen buffer procurement efforts. With onion production estimates for the upcoming year remaining stable, the ministry assures that there are no immediate concerns regarding availability. However, traders are cautious about potential export slowdowns due to competitive pricing from neighboring countries. The article delves into the implications of this price hike and the current state of the onion market.

By Narendra Chaudhary Jul 4, 2026, 15:08 IST

Increase in Onion Procurement Price

Representational Image(Photo: @Olusoji_01/X)

New Delhi, July 4: On Saturday, the government announced a 13% increase in the procurement price of onions, raising it from Rs 1,875 to Rs 2,125 per quintal, effective immediately. This move aims to provide better financial returns for onion farmers and enhance buffer procurement.

The Ministry of Consumer Affairs confirmed that the procurement of onions through NAFED and NCCF for the Price Stabilisation Buffer is currently underway.

This updated procurement price is designed to improve returns for onion growers while bolstering procurement initiatives, according to the ministry's statement.

Onion production is projected to reach 307.37 lakh metric tonnes (LMT) for the 2025-26 period, based on the second advance estimates from the Department of Agriculture & Farmers' Welfare, which is similar to the 307.67 LMT produced in 2024-25.

Given these production forecasts, the ministry indicated that there are no immediate concerns regarding onion availability, although prices may rise slightly in accordance with seasonal trends.

Current stock levels in key states like Maharashtra, Madhya Pradesh, and Gujarat are reported to be sufficient, with no signs of a shortage in stored onions.

Additionally, daily arrivals at mandis across India remain strong, exceeding 50,000 metric tonnes (MT), with Maharashtra contributing over 30,000 MT, and average modal prices hovering around Rs 18 per kg.

High-quality stocks are expected to be released during the lean season, with the national average retail price for onions currently at Rs 31 per kg.

Onion exports are proceeding normally, with approximately 1.50 LMT shipped out in June.

However, traders anticipate a potential slowdown in export activity due to the availability of fresh crops from Pakistan and China at competitive prices in major markets like the Gulf countries, Sri Lanka, and the Far East.

In Maharashtra's Nashik region, Kharif sowing has been delayed by about 15 days, while the sowing progress in Karnataka's Chitradurga and Challakere areas is around 60% of the usual rate, as reported by the government.

The delayed monsoon and below-average rainfall in certain areas have prompted speculative buying among some traders, although there is no significant demand at current price levels in major consumption centers.