Business: The government has increased the buffer stock purchase price of onions to ₹2,125 per quintal. Previously, this rate was ₹1,875 per quintal. The new price will be effective from July 4, 2026. The government’s objective is to provide better prices to farmers and increase procurement for the buffer stock. The government annually creates a buffer stock under the Price Stabilization Fund to control prices by making onions available in the market when needed. This time, initial procurement was much lower than expected, which led to several price increases. Despite this, only about 2,000 tons of onions have been procured so far. Several reasons are being cited for the low procurement. Many farmers are selling onions to private traders because they receive prompt payment and better prices. Furthermore, government procurement has strict quality standards and a shortage of procurement centers in many areas. Currently, onion availability in the country remains normal. The estimated production is approximately 307.37 lakh tons, which is almost equal to last year. Markets are receiving steady arrivals from states like Maharashtra, Madhya Pradesh, and Gujarat. More than 30,000 tons of onion are reaching the market daily from Maharashtra alone. Although supplies are normal, uncertainty remains regarding future prices. Delayed monsoons and low rainfall in some areas are expected to impact the Kharif crop. Some traders are accumulating stocks in anticipation of future shortages. Currently, the average price of onion in the retail market is around ₹31 per kg. If the weather remains normal, a significant price increase is unlikely. However, if rainfall is weak or sowing is delayed, prices may rise. Regarding exports, approximately 150,000 tons of onion were exported in June. Competition in the international market may also impact prices in the future. Overall, this move by the government is an attempt to provide relief to farmers and stabilize the market, but the real impact will depend on the upcoming monsoon and Kharif harvest.
The government increased the price of onions
