The onion is becoming a bigger expense for Indian households just as the festive season approaches. Retail prices have climbed across several major markets, with the Centre now moving buffer stocks to cities where the increase has been particularly sharp.
According to Consumer Affairs department data, the national average retail price of onions was around Rs 42 per kg on August 22, 45 per cent higher than a year earlier and 19 per cent above the previous month. Delhi recorded prices of Rs 65 per kg, compared with Rs 35 a year ago, while Chennai touched Rs 58 against Rs 33 last year.
The rise is even more pronounced in wholesale markets. Data cited by AgroSpectrum India showed the average wholesale price at Rs 2,897.64 per quintal on August 18, up 31.93 per cent in a week and 118.37 per cent from a year earlier.
Why onion prices are rising
The current increase is closely linked to the seasonal gap between the old rabi crop and the next major harvest.
Rabi onions, harvested around March and April, are India's main storage crop and generally supply markets until October. As those stocks decline, markets rely increasingly on smaller kharif supplies from states such as Karnataka, Telangana and Andhra Pradesh.
This year's transition has been difficult. Unseasonal rain and hailstorms in Maharashtra during March and April damaged the late-season crop and affected stored onions, according to Crisil Intelligence. The result has been pressure on both availability and quality.
Kharif arrivals face delays
The next major supply boost is expected from the kharif crop, but sowing in Maharashtra was delayed by the late arrival of the monsoon, The Economic Times reported.
That delay could affect arrivals from the Nashik region and leave markets more dependent on supplies from southern states in the meantime.
Andhra Pradesh has already seen the impact. The Times of India reported that onion prices in the state rose from around Rs 25 per kg in early June to Rs 50-60 per kg in August. Traders attributed the increase to delayed arrivals and adverse weather.
Centre steps in with buffer stocks
The government has been building its onion buffer, but procurement has become more expensive as market prices rise.
The minimum assured procurement price was raised seven times this season, reaching Rs 26.45 per kg by August 18 from about Rs 12.70 per kg, according to Hindustan Times. Government procurement was nevertheless estimated to be around 25 per cent below its two-lakh-tonne target, The Economic Times reported.
To ease supplies, the Centre has announced 'Kanda Express' trains to move onions from Nashik to Delhi, Chennai, Kochi and Guwahati. Buffer stocks will also be released into the open market.
What happens next?
The outlook will depend largely on the timing and volume of the next crop. Experts cited by Hindustan Times expect prices could remain elevated and potentially peak around September-October as rabi stocks run down.
September weather will be particularly important. The Economic Times quoted onion exporter Danish Shah as saying that September weather would be a critical factor—damage from rainfall could put further upward pressure on prices, while good-quality arrivals would help keep prices under control.