1 week ago
Government Blames Speculation as Onion Prices Surge Despite Supplies
Onion prices in India have gone up a lot.
The government says there are still enough onions available.
Consumer Affairs Secretary Nidhi Khare said some traders in Nashik may be making people worry about shortages.
Nashik is an important onion-growing area.
The government also says onion production is expected to be almost the same as last year.
A train carrying about 800 tonnes of onions will bring them from Nashik to Delhi.
These onions will be sold more cheaply at Rs 35 per kilogram.
The government is also sending onions to other cities and keeping reserve stocks.
Prices can normally rise during certain seasons because of festivals, weather and transportation.
Retail onion prices rose 56% year-on-year to Rs 44.72 per kilogram.
Consumer Affairs Secretary Nidhi Khare said production and stocks remain comfortable.
The government suspects some Nashik traders are creating negative supply sentiment.
An 800-tonne Kanda Express shipment will sell onions in Delhi at Rs 35 per kilogram.
India’s 2025-26 onion production is estimated at 30.73 million tonnes.
- Who
- The Department of Consumer Affairs, Consumer Affairs Secretary Nidhi Khare, traders in Nashik, and agencies including NAFED and the National Cooperative Consumers’ Federation of India.
- What
- Onion prices have surged despite government claims of adequate production and stocks, with possible speculative activity under scrutiny.
- Where
- The reported price activity is centered on Nashik, Maharashtra, with impacts in Delhi-NCR and other major consuming centres.
- When
- Retail prices reached Rs 44.72 per kilogram on Tuesday; the first Kanda Express of the season is due to arrive on Wednesday.
- Why
- The government attributes the sharp rise partly to possible negative sentiment created by traders, while also citing seasonal demand, weather, supply-chain movements and market conditions as factors affecting onion prices.
Government Assessment
Market and Seasonal Factors
Cause of the price rise
Government Assessment
Nidhi Khare said some trading-community elements in Nashik were creating negative sentiment about supplies despite comfortable production and ongoing exports.
Market and Seasonal Factors
The government’s official note says onion prices can rise seasonally from August-September because of festive demand, weather, supply-chain movements and changing demand conditions.
Supply conditions
Government Assessment
The government says production, available stocks and market interventions should moderate seasonal price volatility.
Market and Seasonal Factors
Despite the government’s supply assessment, prices are elevated in several markets, including Nashik, Mumbai, Delhi and Delhi-NCR.
Key facts
- Average retail price
- Rs 44.72 per kilogram on Tuesday, up 56% from a year earlier.
- Production estimate
- 30.73 million tonnes for the 2025-26 crop year, compared with 30.76 million tonnes the previous year.
- Nashik mandi prices
- Rs 38-47 per kilogram.
- Kanda Express shipment
- Around 800 tonnes from Nashik, to be sold in Delhi at Rs 35 per kilogram.
- Current exports
- India exported 0.53 million tonnes in FY27 so far, compared with 0.61 million tonnes during the same period in 2025-26.
- Buffer-stock procurement
- NAFED and the National Cooperative Consumers’ Federation of India have procured around 0.12 million tonnes this fiscal year.
- Procurement price
- The onion procurement price reached Rs 2,645 per quintal last week after seven revisions from the May level of Rs 1,270.
Quotes
Nidhi Khare
Consumer Affairs Secretary
“There are some elements in the trading community who are trying to create negative sentiments about supplies while production estimates do not indicate so, while exports are going on smoothly.”
financialexpress.com
“Comfortable production levels, stock availability and proactive market interventions are expected to moderate seasonal price volatility.”
financialexpress.com
Sources
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