India: Government begins targeted onion buffer release as festive demand approaches

• Buffer onions released at INR 35/kg to ease seasonal price pressure
• 2025-26 production forecast to remain stable y-o-y at 30.8 mnt

India’s onion availability is expected to remain comfortable in the coming months, supported by stable production and buffer stocks. The government has begun calibrated releases of buffer onions ahead of the festive and wedding season, using rail and road transport to supply major consumption centres based on market conditions and price trends.

Robust production and buffer stocks support availability

India’s onion production is estimated at 30.737 million tonnes (mnt) in 2025-26, broadly in line with 30.767 mnt a year earlier. For 2026-27, the government set a procurement target of 0.200 mnt of Rabi onions, with procurement starting on 15 May 2026. Around 0.121 mnt has been procured for the buffer.

The Central Warehousing Corporation has been engaged for the first time as the storage agency for the onion buffer during 2026-27 to strengthen storage management and operational efficiency.

With the upcoming festivals and wedding season approaching, onion demand typically strengthens, creating seasonal price pressure. The government has therefore started calibrated buffer releases, with the scale, coverage and distribution channels to be expanded according to arrivals, demand and price trends.

Buffer distribution and retail intervention

Buffer onions are being moved through a hybrid railway and road transportation model to major consumption centres. Supplies are being directed to markets according to prevailing demand, arrivals and price trends, allowing the government to adjust distribution as market conditions change.

Buffer onions will also be sold at INR 35/kg through retail outlets and mobile vans. The initial network comprises nine outlets and 40 mobile vans through NCCF, 13 outlets and 50 mobile vans through NAFED, and around 100 Kendriya Bhandar outlets.

The all-India average retail onion price stood at INR 37.87/kg on 26 August 2026, making the intervention price INR 2.87/kg below the prevailing average.

Strong exports and continuous price monitoring

India exported approximately 0.382 million tonnes of onions during April-June 2026, with Malaysia, Sri Lanka, the UAE and Nepal among the major destinations. Strong exports alongside stable production indicate comfortable overall availability.

Onion prices are monitored daily across 579 centres, with arrivals, demand and price movements guiding the scale and destinations of buffer releases. Further intervention will depend on market conditions.

 Outlook

India’s onion market is expected to remain adequately supplied in the near term, supported by stable production and buffer stocks. However, festive and wedding-season demand could create temporary upward pressure. Targeted releases and INR 35/kg retail sales are expected to help moderate seasonal price volatility and maintain consumer availability.