- Open market prices significantly exceed procurement rate of INR 1,730/quintal
- Farmers show limited interest in buffer stock procurement
The government’s plan to procure 0.2 mnt of onions under the Price Stabilisation Fund (PSF) is facing challenges in Maharashtra as growers continue to prefer open market sales over procurement by NAFED and NCCF.Market participants across key onion-producing regions indicate that prevailing mandi prices remain well above the official procurement rate of INR 1,730/quintal. In several major markets, premium-quality onions are currently trading between INR 2,400 and INR 3,000/quintal, while average prices are largely ranging from INR 2,000 to INR 2,300/quintal, offering growers significantly better realizations through private trade channels.Open market remains more attractive
In Lasalgaon, one of India’s largest onion trading centres, daily arrivals are reported at around 25,000 quintals, with average prices near INR 2,100/quintal and top-quality lots fetching up to INR 2,600/quintal. Similar trends are being observed across other major markets in Nashik district, where arrivals remain steady and open market prices continue to outperform government procurement rates.
Market feedback suggests that apart from the price differential, procurement procedures are also limiting farmer participation. Unlike open market transactions, where payments are generally settled immediately, procurement through government agencies involves registration, quality assessment and grading processes, followed by payment after a waiting period. These additional steps have reduced the attractiveness of the procurement programme for many growers.
Procurement price revised multiple times
The government has revised onion procurement prices upward three times during the current season. Procurement rates were increased from INR 1,270/quintal to INR 1,580/quintal on 22 May, further raised to INR 1,650/quintal on 13 June, and subsequently revised to INR 1,730/quintal from 20 June.
Despite these revisions, market prices in several producing regions continue to remain above procurement levels.
Market outlook
Government procurement is expected to remain slow unless procurement prices become more competitive relative to mandi rates. With arrivals remaining moderate and quality onions commanding a premium in the open market, growers are likely to continue favouring private trade channels. Going forward, procurement volumes will largely depend on price movements in key mandis and the willingness of farmers to divert supplies toward buffer stock operations.
India: Higher mandi prices limit onion procurement under government buffer stock programme
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