The purchase price of onion by government agencies for the purpose of buffer stocks dropped 48% on year to Rs 15/kg for the 2025-26 season.
Sources said that bumper output in the 2024-25 crop season and drop in market prices have reduced the prices offered by state-run Nafed and NCCF. So far, these agencies have purchased 0.19 million tonne (MT) of onion from farmers, against a target of 0.3 MT, against the total procurement of 0.47 MT of staple vegetables last year.
Procurement focused
Purchases are largely from Nashik, Maharashtra, while procurement is also being done in Pune and Ahmednagar districts of the state, along with a few places in Madhya Pradesh and Gujarat.
The onion buffer is released in the market by agencies when retail prices start increasing during festive months.In FY25, the government agencies had purchased 0.47 MT of onion. The agencies sold onion at a subsidised rate of Rs 35/kg from various retail outlets across the country after retail prices started to rise from September, 2025 onwards.
Retail prices & inflation ease
The modal retail prices of onion according to the department of consumer affairs was Rs 28/kg on Monday, a decline of 35% on year. On account of a robust crop prospects, at present mandi prices of onion at Lasalgaon, Nashik, Maharashtra is ruling in the range of Rs 14 – Rs 15 kg, which is over 30% less than prices prevailed a year ago. Retail inflation in onion declined by 26.62% in June, 2025 on year.
According to horticulture crop production estimates, the onion production in the 2024-25 crop year rose by 27% to 30.77 MT compared to previous crop year. “The estimated higher production this season is expected to further ease the market prices in coming months,” according to a recent official note.