Onion procurement price raised for 5th time this season

THe unification regime has raised the allium cepa procurance terms for the fifth time this season after buffer stock purchases remained well below target, people familiar with the matter told HT. Government agencies have procured only around 5,000 tonnes, or 2.5% of the 200,000-tonne procurement target for 2026-27 so far, prompting the latest price revision to accelerate purchases from farmers.The procurement price has been raised to ₹2,125 per 100 kg from ₹1,875 per 100 kg, effective July 4. Since procurement began on June 1, the government has raised the purchase price five times, lifting it 67% from ₹12.70 per kg to ₹21.25 per kg.The buffer stock is maintained under the Price Stabilisation Fund to enable calibrated market releases during the lean supply period between September and November and contain price volatility.The move comes even as industry participants say there is no immediate concern over onion availability and attribute the recent firmness in prices to speculative trading rather than any underlying supply shortage.According to the Department of Agriculture and Farmers’ Welfare’s Second Advance Estimates for 2025-26, onion production is pegged at 30.7 million tonnes, largely unchanged from 30.8 million tonnes a year ago.Prices at the benchmark Lasalgaon wholesale market in Maharashtra’s Nashik district rose by ₹1 per kg after the government’s procurement price notification, a local trader said. Onion prices were quoted at ₹21-27 per kg on Saturday, he said.According to a consumer affairs ministry release, onion stocks in Maharashtra, Madhya Pradesh and Gujarat remain adequate, with no indication of any shortage of onions.Daily mandi arrivals at the all-India level stayed robust at over 50,000 tonne, with Maharashtra alone accounting for more than 30,000 tonne at an average modal price of about ₹18 per kg, as per the government release. The all-India average retail price stands at ₹31 per kg, it added.The ministry said lower-than-normal rainfall in some regions has triggered speculative buying, particularly in Nashik and parts of Madhya Pradesh. “However, demand remains weak in major consuming centres, suggesting the buying is driven more by expectations of a future price recovery than by underlying demand,” the release said.While exports in June were normal at 150,000 tonnes, 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, the release added.India, one of the world’s largest onion producers, grows 28-30 million tonnes annually, with the rabi crop accounting for nearly 75% of total output.The procurement target every year has varied with market conditions. The government procured 470,000 tonnes for the buffer stock in 2024-25 and began releasing onions from September to cool prices. Procurement was scaled down to 300,000 tonnes the following year as supplies improved.