Nashik: The Central Government is expected to begin the phased release of onions from its buffer stock from September to keep retail prices under control during the festive season. While the move is aimed at protecting consumers from a price surge, onion growers in Nashik district—including those in Lasalgaon, Asia's largest onion market—fear it could depress market prices just when they expect better returns.
The plan follows a recent visit by a high-level team from the Union Ministry of Consumer Affairs to Nashik to review onion procurement, storage facilities and prevailing market conditions. Based on its assessment, the Centre is preparing to release buffer stock onions in major consumption centres if retail prices begin to rise.
The government had set a target of procuring 2 lakh metric tonnes of onions through the National Agricultural Cooperative Marketing Federation of India (NAFED) and the National Cooperative Consumers' Federation (NCCF). However, only around 50,000 metric tonnes have been procured so far, raising questions about whether the available stock will be sufficient to effectively stabilise retail prices during the festive season.
To strengthen its reserves, the Centre recently increased the procurement price for buffer stock onions to ₹2,125 per quintal. The stored onions are expected to be released in phases across major consumption centres, including Delhi, Mumbai, Kolkata and Chennai, depending on market demand and price trends.
Farmers in Nashik, who have endured erratic weather, rising input costs and volatile prices this season, say they have stored onions in anticipation of improved rates during September and October. However, market experts believe the government's intervention during the same period could put downward pressure on wholesale prices, reducing farmers' earnings.
The Maharashtra State Onion Growers' Association has criticised the proposed move, arguing that government intervention whenever onion prices begin to rise prevents farmers from receiving remunerative prices. The association maintains that while controlling food inflation is important, policies should also ensure fair returns for cultivators grappling with increasing production costs.
Exporters have also flagged concerns over weak overseas demand. According to industry representatives, Indian onions are currently facing stiff competition from lower-priced supplies from Pakistan and China, resulting in fewer export orders.
"India's onion exports are currently moving at a slow pace. Indian onions are facing stiff competition in international markets from cheaper onions supplied by Pakistan and China. As a result, exporters are not receiving the expected number of orders. If the government provides export incentives and reduces logistics costs, Indian onions will become more competitive in global markets," said Vikas Singh, Vice President, Horticulture Producers Exporters Association, Nashik.
While the government's proposed buffer stock release is intended to curb food inflation and ensure adequate onion supplies during the festive season, farmers and traders across Maharashtra will be closely watching its impact on market prices and farm incomes in the months ahead.
