To boost the procurement for the buffer, the government on Saturday revised upward onion procurement price in Maharashtra by 13% to Rs 2125/quintal under price stabilisation fund (PSF) from Rs 1875/quintal fixed last month.
The procurement have sluggish this season because of lower prices offered to farmers compared to market prices and the Department of Consumer Affairs revised the purchase price for the third time this fiscal. The minimum assured procurement price for the vegetable was raised to Rs 16.50/kg on June 13 from ₹15.80/kg announced on June 1. In May, onion procurement price was fixed at Rs 12.70/kg.
Overall purchase of onion by Farmers’ cooperative NAFED and National Cooperative Consumers’ Federation of India made a slow start, with only around 2,000 tonnes purchased from farmers since June 1, despite several revisions in prices.
Why prices were revised
“If the government would have offered market prices of onion to farmers which is currently ruling around Rs 2000 – Rs 2100 / quintal, agencies would procured substantial quantities by now,” Jaydutt Holkar, director of the Agricultural Produce Market Committee (APMC), Lasalgaon, Nashik, Maharashtra, told FE. Holkar said the revised prices offered are at parity with the prevailing market prices.
The revised rate will ensure better returns for onion farmers while supporting the buffer procurement efforts, according to an official note.
In May, the department had set a procurement target of 0.1 million tonne (MT) for Nafed and NCCF of onions each for the current fiscal year. These agencies had procured 0.3 MT and 0.47 MT of key vegetables in FY26 and FY25, respectively.
The average retail price of onion according to the department of consumer affairs has increased to Rs 31.21/kg on Friday, an increase of 11% compared to previous year. Prices have increased by 19% in the last one month, as exports to the Gulf region earlier disrupted due to the West Asia crisis.
Onions procured under the PSF are typically released into the market in a calibrated manner when retail prices begin to rise, usually around October.
Supply outlook positive
Onion production in 2025-26 crop year (July-June) according to the second advance estimate of the agriculture ministry is 30.73 million tonne (MT) which is comparable to the production of 30.76 MT in 2024-25 crop year.
“Going by the production estimates, the overall availability is not a concern at this stage though prices may be expected to inch up in line with the normal price seasonality,” according to an official note.
Current stock levels in Maharashtra, Madhya Pradesh and Gujarat are adequate. At present, there are no indications of any shortage of stored onions, it stated.
The delay in monsoon arrival and lower-than-normal rainfall in some regions has led to speculative buying by a section of traders though there is no significant demand at the prevailing price levels in major consuming centres, the department has noted.
The rabi onion harvest, accounts for 70-75% of the country’s total onion production, meets the domestic supplies and ensures stability in prices till arrivals of the kharif crops from October onwards.