Onion Prices Surge From ₹37 To ₹75/Kg: Why Are Prices Rising Despite Adequate Supply?

September 2, 2026

From around ₹37 to as high as ₹75 per kilogram in just a short span — the onion is once again making India cry.

Retail onion prices have surged across several parts of the counTtry, with major cities such as Delhi, Kolkata and Chennai witnessing sharp increases.

But here is the big question — if the government says there is enough onion in the country, then why are consumers paying almost double?

The answer lies not in one single shortage, but in a combination of seasonality, old stocks running out, fresh crop arriving later, weather conditions, rising demand and market behaviour.

Let us break down what is happening.

The Official Picture

According to the government, India’s onion production for 2025-26 is estimated at 307.37 lakh metric tonnes, or LMT.

That is almost the same as the previous year’s production of 307.67 LMT.

So, there is no indication of a major nationwide production shortage.

The government had also set a target of procuring 2 lakh tonnes of Rabi onion for its Price Stabilisation Fund buffer in 2026-27.

Procurement began on May 15 through NAFED and NCCF, and around 1.21 lakh tonnes had been procured.

So, if production is broadly comfortable, why are prices rising?

Reason One — The Old Stock Is Running Out

To understand the onion price cycle, we first need to understand how onions reach our kitchens.

The Rabi onion crop, harvested mainly around March and April, is extremely important because it is stored and supplied during the lean months.

Normally, this stored onion helps bridge the gap until the next crop arrives.

But this year, the transition has been tighter.

Weather-related problems and storage losses have affected the quality and shelf life of some stocks.

That means the quantity of onion available for immediate consumption can become much smaller even when the overall production figure looks comfortable.

So, enough onion on paper does not necessarily mean enough good-quality onion in every market at every point in time.

Reason Two — The Lean-Season Gap

August and September are traditionally difficult months for the onion market.

The old Rabi stock is nearing exhaustion, while the fresh Kharif onion crop is yet to arrive in significant quantities.

Normally, the new crop begins improving supplies around October.

This year, that transition has put additional pressure on the market.

And there is another factor — demand.

The government itself points to the festive period, including Onam, Ganesh Chaturthi, Durga Puja, Dussehra and Diwali, along with the wedding season, as periods when onion demand normally rises.

When supply is tight and demand increases at the same time, prices naturally come under pressure.

Reason Three — Market Pressure

There is also the question of what happens between the farmer and the consumer.

When prices start moving upwards, traders may hold stocks back in anticipation of even higher prices.

That can reduce arrivals in the mandi and create additional pressure on wholesale prices.

This is why the government uses buffer stocks — to release onions into the market when prices become volatile.

So, What Is The Government Doing?

The Centre has now stepped up its intervention.

First — Buffer Stock Release

The government has started a calibrated and targeted release of onions from its buffer stock.

The aim is simple — increase supplies in markets where prices are under pressure.

The buffer disposal began on August 24, through NAFED and NCCF.

Second — Onion At ₹35 Per Kg

The government is also selling buffer onions at ₹35 per kilogram through outlets and mobile vans operated by NCCF, NAFED and Kendriya Bhandar.

This is particularly aimed at giving consumers an alternative to expensive retail-market onions.

The government began this intervention in Delhi-NCR on August 27.

Third — Kanda Express

And then there is the Kanda Express.

The idea is straightforward — instead of waiting for onions to move slowly through the usual supply chain, the government is using railway rakes to move buffer onions from producing regions to major consumption centres.

The latest intervention uses a hybrid model of rail and road transportation, with supplies being moved to major consumption centres.

The Centre says the operation has now been expanded to 19 cities, with Kanda Express railway rakes and more than 30 trucks being deployed.

Road transportation is also being used to move onions to markets where demand is high.

What About Storage?

There is another important change this year.

For the first time, the Central Warehousing Corporation, or CWC, has been engaged as the storage agency for the government’s onion buffer.

The objective is to improve storage management and reduce losses.

Is India Actually Running Out Of Onions?

No.

That is perhaps the most important point.

The government’s latest assessment says onion availability remains adequate.

Production is estimated at 307.37 LMT, almost unchanged from last year’s 307.67 LMT.

So this is not a story of India suddenly running out of onions.

It is largely a story of timing and supply management.

The old crop is nearing its end, the fresh Kharif crop is still arriving, demand is rising because of the festive season, and prices are responding to this temporary supply pressure.

What Next?

The government expects supplies to remain comfortable in the coming months.

The big relief should come with the arrival of the fresh Kharif onion crop, which is expected to improve market availability.

Until then, the government is using two major shields — ₹35-per-kg buffer sales and Kanda Express — to increase supplies and control price pressure.

So, the onion price story is not simply about production.

It is about when the onion is available, where it is available, how much of it can be stored, and how quickly it can reach the consumer.

And until the next crop strengthens supplies, the humble onion could continue to put pressure on household budgets.