India: Centre to release onion buffer stocks from September to curb festive price rise

• Centre to release onion stocks covering festive period till December 
• Retail and wholesale onion prices rise over 22% YoY ahead of peak festive demand

The central government will begin a calibrated release of onion buffer stocks from September 2026 to bridge the supply gap during the festive season, covering the period from Durga Puja until fresh kharif arrivals in November and December. The phased release aims to improve market availability, discourage hoarding and speculative trading, and contain food inflation during the festive and wedding season.

Retail and wholesale onion prices surge

According to the Department of Consumer Affairs, the all-India average retail onion price reached INR 34.51/kg on 18 July 2026, up 22.2% YoY from INR 28.25/kg and 26% MoM from INR 27.39/kg. The all-India average wholesale price increased to INR 2,716.21/quintal, up 22% YoY from INR 2,225.67/quintal and 30.3% MoM from INR 2,084.83/quintal.

Retail prices have crossed INR 50/kg in several markets. Prices stood at INR 43/kg in Delhi (up from INR 33/kg), INR 37/kg in Mumbai (from INR 33/kg), INR 40/kg in Chennai (from INR 32/kg), and INR 27/kg in Ranchi (from INR 25/kg).

Government targets 200,000 tonnes for buffer stock

The Centre has set a procurement target of 200,000 tonnes for the onion buffer stock and increased the procurement price by 13% on 4 July 2026 to INR 2,125/quintal from INR 1,875/quintal. Officials have reviewed procurement operations, storage conditions and marketable stocks in Nashik and other key producing states to support phased releases.

The buffer stock will be supplied through wholesale markets, state governments, cooperative agencies, and subsidised retail channels such as Safal outlets and mobile vans.

Inflation concerns persist

Rising onion prices continue to pressure inflation, with onions carrying a 0.7006% weight in the revised 2024 CPI basket. India’s CPI-based retail inflation rose to 4.38% in June from 3.93% in May, exceeding the RBI’s 4% target for the first time since January 2025 and the first time under the revised CPI series with January 2026 as the new base year.

Outlook

The planned buffer stock release from September is expected to improve onion availability and moderate prices until fresh kharif onions reach mandis. The pace of buffer releases and new crop arrivals will remain key factors influencing onion prices through the end of 2026.