Onion Prices Stay High Despite Rs 35 Government Sale: Here’s Why

Onion prices remain elevated across India despite the government selling buffer-stock onions at Rs 35 per kg. The all-India average retail price reached Rs 53.84 per kg on September 16, nearly 94% higher than Rs 27.71 a year earlier, while the average wholesale price stood at Rs 45.65.

The government began releasing onions from its Price Stabilisation Fund buffer on August 24 through NCCF, NAFED, Kendriya Bhandar and mobile outlets. Railway rakes and trucks are also being used to transport supplies from producing states to major consumption centres, with the operation expanded to 19 cities.

However, getting subsidised onions to consumers at scale remains a challenge. Prices typically rise during the transition from the rabi to kharif crop, as stored rabi supplies decline before fresh arrivals increase. This year, delayed kharif sowing in key producing regions has added to supply uncertainty.

The government estimates 2025-26 onion production at 307.37 lakh tonnes, broadly similar to the previous year’s 307.67 lakh tonnes, and says there is no overall shortage. It targeted 2 lakh tonnes of rabi onions for the 2026-27 buffer and had procured about 1.21 lakh tonnes.

The government has also increased the procurement price from Rs 1,875 to Rs 2,125 per quintal. For consumers, the key factor now is the arrival of fresh kharif onions. Until supplies improve, uneven distribution and declining stored stocks could keep market prices significantly above the government’s Rs 35 rate.

Published: 1h ago

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