India: Centre steps up buffer onion dispatches as retail prices reach up to INR 65/kg

• 840-t consignment to be shipped to Chennai to strengthen supply
• Buffer releases push Lasalgaon wholesale prices down 10%

The Centre is set to dispatch an 840-tonne (t) onion consignment to Chennai on Aug 29 from its buffer stock, following the movement of 500 tonnes to Delhi through the Kanda Express on Aug 26. The rail-based intervention comes as retail onion prices have climbed to INR 50-65/kg in several cities, prompting the government to accelerate supplies to major consumption centres.

Loading of the Chennai-bound consignment was underway at Manmad on 28 August, and the shipment is expected to move after completion. The Centre has also expanded road-based distribution, with two truckloads each recently dispatched to Delhi and Guwahati. Further consignments are planned for other markets where retail prices remain elevated.

Govt expands distribution network to contain retail price pressure

The Centre has procured around 121,000 t of onions for its buffer stock through NAFED and NCCF to stabilise availability and contain price spikes. Under the Kanda Express initiative, buffer onions are being sold at a subsidised INR 35/kg through NAFED, NCCF and Kendriya Bhandar outlets.Subsidised sales began in Delhi on 28 August following the arrival of the first rail consignment from Nashik. The Consumer Affairs Ministry has indicated that additional rail consignments could be directed to Ernakulam, Madurai and Guwahati, alongside Delhi and Chennai, to improve availability in high-price markets.

The intervention has also started influencing wholesale prices in Maharashtra. At Lasalgaon APMC, average onion prices declined by around 10% in four days, falling by INR 450/quintal from INR 4,250/quintal on 25 August to INR 3,800/quintal on 28 August. Traders attributed the decline to increased availability following the release of buffer onions into key consumption centres.

Outlook

The Centre’s continued movement of buffer onions through rail and road channels is expected to provide additional supplies to high-price consumption markets and moderate retail price pressures. The Chennai consignment, along with potential dispatches to other cities, could improve availability across major consuming centres.

Wholesale prices in Nashik will remain sensitive to the pace of buffer-stock releases and their impact on demand from consuming markets. If government supplies continue to reach deficit markets in larger volumes, prices could remain under pressure. However, sustained retail price moderation will depend on whether the additional supplies are sufficient to offset prevailing market tightness.