The two primary agencies responsible for procurement — Nafed and the National Cooperative Exports Limited (NCCF) — have only secured about 1% of the 200,000-tonne target set by the government for this year under the Price Stabilisation Fund (PSF).
The procurement price has been raised multiple times since the season began: from ₹12.70 per kg to ₹15.80 per kg on May 22, then to ₹16.50 per kg on June 13, and lastly to ₹17.30 per kg on June 20.
”Since June 1, around 2,000 tonnes have been procured,” a senior official from the consumer affairs ministry informed PTI.
Market participants believe the issue stems from quality differences.
”Grade A onions are fetching a premium in the market. At ₹17.30 per kg, government agencies can primarily acquire URS (Under Relaxed Specifications) onions, as most Grade A produce is being directed toward exports,” said Ramesh Patil, a trader based in Lasalgaon, the largest wholesale onion market in the country, to PTI.
Nitin Seth, another trader from Lasalgaon, emphasized that farmer sentiment plays a crucial role.
”Mandi arrivals have been good, but some farmers are holding back their stock, hoping for better prices. The three price increases haven’t sufficiently met their expectations,” Seth added.
The government is unlikely to increase the procurement price in the short term.
Officials from the Ministry of Consumer Affairs mentioned that another revision could encourage cartel behavior among traders.
However, a senior ministry official downplayed the slow start, observing that the procurement pace in the first month aligns with last year’s and should speed up in the coming months.
Onions for the buffer stock are sourced from the rabi harvest and stored to mitigate price spikes during lean supply periods, benefiting both farmers and consumers. The quality of onions has been impacted by unseasonal rains.
The government has revamped its procurement and storage framework for 2026.
The Central Warehousing Corporation (CWC) is now designated as the main storage agency, operating under stricter storage standards. Nafed and NCCF have also optimized their network of empanelled procurement societies to enhance operational efficiency.
On the production front, the agriculture ministry has estimated onion output at 307.71 lakh tonnes for the 2025-26 crop year (July-June), which is largely consistent with the previous year, providing little reassurance on supply if procurement continues to lag.
