Onion prices are rising sharply despite comfortable production and adequate stocks, prompting the government to flag possible speculative activity in Nashik, the country’s key onion-producing region. Retail onion prices rose 56% year-on-year to Rs 44.72/kg on Tuesday, even as the government said supplies remained sufficient.
Consumer Affairs Secretary Nidhi Khare said some traders in Nashik were trying to create negative sentiment around supplies despite the comfortable production outlook.
Speaking to FE, Consumer Affairs Secretary Nidhi Khare said: “There are some elements in the trading community who are trying to create negative sentiments about supplies while production estimates do not indicate so, while exports are going on smoothly.”
Further, Khare added that onion production during the 2025-26 crop year (June-July) is estimated at 30.73 million tonnes (MT), against 30.76 MT in the previous year, indicating that there is currently little concern over supplies.
Sources said mandi prices in Nashik, Maharashtra, the key producing region, are ruling in the range of Rs 38-47/kg, while prices in Mumbai and Delhi are in the range of Rs 33-34/kg and Rs 25-25.5/kg, respectively, indicating possible speculative activity.
“Comfortable production levels, stock availability and proactive market interventions are expected to moderate seasonal price volatility,” Khare added.
According to the Department of Consumer Affairs, the average retail price of onions rose to Rs 44.72/kg on Tuesday, up 56% from a year earlier. Retail prices have risen by more than 19% over the past month, while prices in Delhi-NCR have crossed Rs 55/kg.
The first ‘Kanda Express’ of the season, carrying around 800 tonne of onions from Nashik, Maharashtra, will reach the national capital on Wednesday. The onions will be sold to retail consumers at a subsidised rate of Rs 35/kg through outlets and mobile vans operated by NAFED, NCCF and Kendriya Bhandars.
Bulk onions will be transported using dedicated railway rakes to major consuming centres such as Madurai, Chennai, Ernakulam and Guwahati from the buffer stock held in Nashik.
In FY26, the Department of Consumer Affairs transported 86 rail rakes carrying 88,000 tonnes of onions to major consuming centres.
Historically, according to an official note, onion prices have exhibited seasonal upticks and volatility from August-September onwards due to increased festive-season demand, weather conditions, supply-chain movements and demand conditions during this period.
In terms of exports, India has exported 0.53 MT of onions in FY27 so far, against 0.61 MT during the same period in 2025-26.
Farmers’ cooperatives NAFED and the National Cooperative Consumers’ Federation of India have so far procured around 0.12 MT of onions for the current fiscal year’s buffer stock. The agencies had procured 0.3 MT and 0.47 MT in FY26 and FY25, respectively.
The procurement price for onions by NAFED and NCCF was fixed at Rs 1,270/quintal in May and has since been revised seven times, reaching Rs 2,645/quintal last week to encourage procurement.
The rabi onion harvest, which accounts for 70-75% of India’s total onion production, plays a critical role in meeting domestic demand and maintaining price stability until kharif arrivals begin in October.
Sowing of kharif onions in key producing states, including Maharashtra, Madhya Pradesh, Rajasthan and Karnataka, has been completed this season.