Government releases onion buffer stocks as production holds at 307 LMT; ₹35/kg sales planned across 200+ outlets

The government has begun a calibrated release of onion buffer stocks to major consumption centres as it seeks to contain seasonal price pressures ahead of the festive and wedding season, according to a release by the Ministry of Consumer Affairs, Food & Public Distribution. The intervention will use a hybrid logistics model involving railway rakes and road transport, with the scale and destinations of supplies to be adjusted according to market prices, arrivals and demand.

The move comes despite a comfortable domestic supply outlook. Onion production is estimated at 307.37 Lakh Metric Tonnes (LMT) in 2025-26, almost unchanged from 307.67 LMT a year earlier. The government had set a 2 LMT procurement target for the Price Stabilization Fund (PSF) buffer for 2026-27, with procurement beginning on May 15 through NAFED and NCCF. About 1.21 LMT has been procured so far.

₹35/kg onion sales through NCCF, NAFED

To provide consumers relief, onions will be sold at ₹35 per kg through NCCF and NAFED outlets and mobile vans, along with Safal and Kendriya Bhandar outlets.

NCCF will deploy 9 outlets and 40 mobile vans, while NAFED will operate through 13 outlets and 50 mobile vans. Kendriya Bhandar will make onions available through about 100 outlets, taking the identified retail network to more than 200 outlets and mobile vans.

The government has also engaged the Central Warehousing Corporation (CWC) for the first time as the storage agency for the PSF onion buffer this financial year.

Kanda Express expands onion logistics

The Centre is stepping up rail-based movement of buffer stocks through the Kanda Express initiative. In 2024-25, 14 railway rakes moved nearly 12,000 tonnes of onions to five cities. This increased sharply in 2025-26, when 86 rakes transported around 88,000 tonnes to 16 cities.

The first Kanda Express of the current financial year has departed Nashik for New Delhi, while road consignments are being sent to Chennai, Kolkata, Ernakulam, Guwahati, Varanasi, Lucknow, Patna, Chandigarh, Jammu and Amritsar.

Onion exports touch 3.82 LMT in Q1 FY27

Despite the domestic price intervention, onion exports remain strong. India exported approximately 3.82 LMT of onions during April-June 2026, with Malaysia, Sri Lanka, the UAE and Nepal among the major destinations.

The Department of Consumer Affairs monitors prices of 41 essential commodities across 579 centres daily. As of August 26, the all-India average retail price of onion stood at ₹37.87/kg, compared with ₹38.33 for tomato and ₹22.63 for potato. Chana dal was priced at ₹86.71/kg, while tur dal stood at ₹123.30/kg.

The government said tomato, potato and chana dal prices are lower than a year ago and that further onion buffer releases will be calibrated according to market conditions to prevent unwarranted price increases while protecting farmer interests.