India: Centre raises onion procurement price to INR 1,730/quintal amid weak export demand

• Procurement price revised twice within a week to support growers
  
  
• Sluggish exports continue to pressure domestic onion prices
  
  

India's government has increased the onion procurement price under the Price Stabilisation Fund (PSF) to INR 1,730/quintal effective 20 June, marking the second upward revision within a week as authorities seek to support growers amid weak market conditions and subdued export demand.

Procurement for the 2026 season initially began at INR 1,580/quintal and was raised to INR 1,650/quintal on 13 June before the latest increase. The revised price is expected to accelerate purchases by government agencies for buffer stock creation and provide some support to market sentiment.

Export slowdown weighs on prices

Domestic onion prices have remained under pressure due to sluggish export movement, largely linked to ongoing geopolitical tensions in West Asia. Reduced overseas demand has kept more supplies within the domestic market, limiting price recovery across key producing regions and affecting farmer realizations.

Market participants said ample availability continues to cap any significant upside in wholesale prices despite seasonal procurement efforts.

Buffer stock procurement gathers pace

The Centre has retained its onion buffer stock procurement target at 0.2 MMT for the current season. Procurement operations, which commenced on 15 May, are being undertaken by NAFED and NCCF to build reserves aimed at managing future price volatility and ensuring supply availability during lean periods.

Despite the latest price increase, farmer groups, particularly in Maharashtra, continue to seek higher procurement rates, citing increased costs for labour, fertilizers, irrigation and other farm inputs. Growers have demanded procurement prices closer to INR 3,000/quintal to ensure remunerative returns.

Outlook

The higher procurement price may lend near-term support to mandi sentiment and government buying activity. However, comfortable domestic supplies and weak export demand are expected to keep the market largely rangebound. India's onion production for 2025-26 is estimated at 30.74 MMT, marginally below 30.77 MMT recorded a year earlier, indicating continued supply adequacy in the months ahead.