**Executive Summary**
Effective July 4, 2026, the Government of India has increased the onion procurement price for the Price Stabilisation Buffer by 13%, raising it from ₹1,875 to ₹2,125 per quintal. The initiative aims to secure better returns for farmers and strengthen the national buffer stock through NAFED and NCCF. Despite speculative trading and monsoon delays in certain regions, overall onion production for 2025-26 is estimated to remain stable at 307.37 lakh metric tonnes (LMT).
**Key Points / Main Content**
* **Revised Procurement Terms**
* The procurement price is increased to ₹2,125 per quintal to support farmer welfare.
* Procurement is currently being executed by NAFED and NCCF for the Price Stabilisation Buffer.
* The new rate became effective as of July 4, 2026.
* **Production and Stock Availability**
* Estimated production for 2025-26 is 307.37 LMT, nearly identical to the 307.67 LMT produced in 2024-25.
* Stock levels are reported as adequate in Gujarat, Madhya Pradesh, and Maharashtra, with no current indications of shortages.
* Daily mandi arrivals remain robust at over 50,000 metric tonnes (MT) nationwide, with Maharashtra contributing over 30,000 MT.
* **Market Prices and Speculation**
* The all-India average retail price stands at ₹31 per kg, while the average modal mandi price is approximately ₹18 per kg.
* Delayed monsoon arrivals have triggered speculative buying by some traders in production centers like Nashik and Madhya Pradesh.
* Better-quality stocks are being held in storage for release during the upcoming lean period.
* **Export and Sowing Status**
* Approximately 1.50 LMT of onions were exported in June 2026.
* A temporary slowdown in exports is expected due to competitive pricing from Pakistan and China in the Gulf, Sri Lanka, and Far East markets.
* Kharif sowing is delayed by 15 days in Nashik, while sowing in Karnataka's Chitradurga and Challakere belt is at 60% of normal levels.
**Impact Analysis**
**Onion Farmers**
**Impact:** Farmers will receive a 13% higher return on their produce compared to previous rates.
**Action Required:** Farmers should engage with NAFED and NCCF to avail of the revised procurement price of ₹2,125 per quintal.
**Government Agencies (NAFED and NCCF)**
**Impact:** These agencies are tasked with managing the increased procurement costs to build the National onion buffer stock.
**Action Required:** Continue procurement operations at the revised rates to meet buffer targets.
**Traders**
**Impact:** Traders face potential competition in international markets from cheaper crops from Pakistan and China and are currently navigating price seasonality and monsoon-related delays.
**Action Required:** Monitor international price trends and domestic arrival patterns to manage export volumes and speculative risks.
**Consumers**
**Impact:** While prices may "inch up" due to normal seasonality, the release of stored quality stocks during the lean period aims to stabilize availability.
**Action Required:** No specific action required; monitor retail price trends.
Key Entities Referenced
Ministry of Consumer Affairs, Food & Public Distribution: The primary government body responsible for the policy decision to increase onion procurement prices and manage national buffer stocks.
Price Stabilisation Fund (PSF): The central government scheme and buffer mechanism used to stabilize the prices of essential agri-horticultural commodities like onions.
NAFED: The National Agricultural Cooperative Marketing Federation of India, a key agency designated to procure onions directly from farmers for the buffer stock.
NCCF: The National Cooperative Consumers' Federation of India, a primary agency responsible for onion procurement and supporting the Price Stabilisation Buffer.
Department of Agriculture & Farmers' Welfare: The department providing the production estimates and agricultural data used to inform procurement and price stabilization policies.
Ministry of Consumer Affairs, Food & Public Distribution
Government raises onion procurement price by
13% to ₹2,125 per quintal, ensuring better
returns for onion farmers and strengthening
buffer procurement
प्रव तथ: 04 JUL 2026 12:47PM by PIB Delhi
The Government has increased the procurement price of onions for the Price Stabilisation Buffer by 13%,
from ₹1,875 per quintal to ₹2,125 per quintal. The revised procurement price is effective from 4 July
2026. Procurement of onions through NAFED and NCCF for the Government's Price Stabilisation Buffer
is in progress. The revised procurement price will ensure better returns for onion farmers while supporting
buffer procurement efforts.
As per the Second Advance Estimates of the Department of Agriculture & Farmers' Welfare for 2025-26,
onion production is estimated at 307.37 lakh metric tonnes (LMT), which is comparable to the production
of 307.67 LMT in 2024-25. Going by the production estimates, the overall availability of onions is not a
concern at this stage, though prices may be expected to inch up in line with the normal price seasonality.
Current stock levels in Maharashtra, Madhya Pradesh and Gujarat are adequate. At present, there are no
indications of any shortage of stored onions.
Daily mandi arrivals at the all-India level remain robust at over 50,000 metric tonnes (MT), while arrivals
in Maharashtra are over 30,000 MT, with average modal prices of about ₹18 per kg. Better-quality stocks
continue to remain in storage and are expected to be released during the lean period. The all-India average
retail price is ₹31 per kg.
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. Despite the sentiment in consumer markets, production centres such as Nashik and
parts of Madhya Pradesh are witnessing a tendency for speculative trading activity, largely on expectations
of a future market recovery rather than on strong underlying demand.
Onion exports are normal, with about 1.50 LMT exported during June 2026. However, 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.
While the Nashik region of Maharashtra has reported about a 15-day delay in Kharif sowing, the sowing
progress in the Chitradurga and Challakere belt of Karnataka is estimated to be around 60 per cent of
normal.To strengthen farmer welfare, the Government has increased the onion
procurement rate in Maharashtra from ₹1875 per quintal to ₹2125 per quintal
under PSF for creating the National onion buffer stock. The new rate, which is
around 13% higher than the previous rate, is effective… pic.twitter.com/o2kWKxo
tkt
— Consumer Affairs (@jagograhakjago) July 4, 2026
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RT/SB/ARC
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