The Union government plans to release its entire onion buffer stock through retail sales this year. This decision comes after the government procured only about 120,000 tonnes of onions, falling short of its 200,000-tonne target. This marks a shift from the previous two years, during which the government intervened in both wholesale and retail markets to stabilize prices, according to officials familiar with the situation.
The shortfall follows an unusually difficult procurement season, during which the Centre was forced to raise the Minimum Assured Procurement Price (MAPP) six times as firm market prices discouraged farmers from selling to government agencies. Officials also cited operational challenges involving procurement and storage agencies that slowed purchases. The onion buffer, maintained under the Price Stabilisation Fund, is used to cool prices by releasing subsidised stocks during periods of tight supply. “Major challenge here is storage and then infusing in market.
Meanwhile, the year-on-year consumer price inflation in onion has risen to 22.5% in July, up from the 4.7% it stood at in June. Last year, the Centre sold buffer-stock onions at ₹ 24 per kg through NAFED and NCCF retail outlets across major cities, including Delhi-NCR, Mumbai, Ahmedabad, Chennai, Kolkata and Guwahati.
Officials said this year’s sales will similarly be calibrated to price movements in major consumption centres. Selling in retail has direct effect on consumer prices and hence effective,” said Madan Sabnavis, chief economist at Bank of Baroda.
