Onion prices across India have witnessed a sharp decline due to multiple factors such as weakening market demand, limited storage capacities, and an overall lack of efficient processing infrastructure. Government procurement agencies like NAFED and NCCF have received a lukewarm response during their recent onion buying efforts. Adding to the crisis, Bangladesh—a key export market for Indian onions—has adopted a firm stance by relying on its local produce. Meanwhile, large volumes of onion from southern states, Maharashtra, Madhya Pradesh, and buffer stock from NAFED and NCCF are poised to enter the market simultaneously, further increasing supply and deepening the price crisis.
Experts predict that this sudden influx of supply will cause onion prices to fall even further. Currently, onions from the southern states have slowly entered local markets and are expected to dominate them shortly, leaving little demand for onions from Maharashtra. Presently, farmers are receiving just ₹1,300 to ₹1,400 per quintal, with fears that prices may drop further. Although rumors of NAFED halting procurement have spread, officials have denied this and confirmed that 22 centers remain active in the state. However, if over three lakh tons of onion from various states hit the market simultaneously, prices may spiral downward, causing significant distress to farmers.
**Calls Grow for Increased Export Subsidy to Counter Pakistan, China Competition**
As the domestic market continues to be oversupplied, experts have highlighted the growing threat from international competitors like Pakistan and China. Both countries have produced abundant onion crops this year and are offering them at lower prices in global markets. Experts argue that Indian exporters cannot compete globally without stronger government support. They are urging the government to increase the current export incentive from 1.9% to 5%, which could help stabilize domestic prices and make Indian onions more competitive. A memorandum demanding this hike has already been submitted to the Union Commerce Minister, with exporters emphasizing the benefit it would bring to the entire supply chain.
In the meantime, farmers are stockpiling onions in storage sheds, hoping for a turnaround in prices. However, weak demand has led to inactivity at NAFED and NCCF procurement centers. If prices remain low, traders and farmers alike could face severe financial stress. Meanwhile, Bangladesh—traditionally the largest importer of Indian onions—has reported a strong domestic harvest this year, reducing its dependency on Indian supply. As a result, India’s onion exports to Bangladesh have significantly slowed. However, experts believe that by August, Bangladesh may need to import onions again, potentially offering temporary relief to Indian exporters and farmers.