Onion Market Update: Government Intervention Brings Price Stability, Supply Eases Amid Strong Kharif Crop

The global onion market, especially in India—the world’s largest producer and consumer—has recently experienced significant price adjustment instigated by decisive government actions and improved harvest conditions. After a tumultuous period in early 2025 fueled by unseasonal rains and reduced rabi output, India’s onion procurement price has notably been decreased from $1,543 to $967 per tonne—an impressive cut of $576 per tonne. This carefully orchestrated decision reflects an alignment with stabilizing wholesale and retail prices across major markets, especially in states like Maharashtra where average wholesale rates at Lasalgaon mandi fluctuated between $610 and $670 per tonne.

Beneath these price trends lies a complex interplay of policy, weather, and trade flows. Kharif sowing has progressed well, ensuring steady arrivals and bolstering government confidence in slashing support prices. Retail costs have also become less volatile, hovering comfortably between $0.36 and $0.48 per kg. To balance the interests of producers and consumers and prevent retail inflation, key agencies like Nafed and NCCF are continuing their buffer stock programs, targeting 500,000 tonnes for 2025-26. With 250,000 tonnes already secured, these reserves will help ensure supply sufficiency during critical festive demand peaks. Looking ahead, traders anticipate range-bound onion prices barring sharp changes in export demand or potential setbacks to the newly planted kharif crop. The combination of improved weather, healthy government procurement, and robust stocks signals a period of market stability—though vigilance remains necessary should external shocks arise.

📈 Prices: Current Onion Market Snapshot

Product	Origin	Delivery Terms	Latest Price (EUR)	Previous Price (EUR)	Update Date
Onions fried (crispy)	PL	FCA	3.42	3.42	2025-07-29
Onion powder (grade – B)	IN	FOB	1.32	1.32	2025-07-26
Onion powder (white)	IN	FOB	1.59	1.59	2025-07-26
Onion powder (organic)	IN	FOB	2.67	2.67	2025-07-26
Onion flakes (organic)	IN	FOB	5.14	5.14	2025-07-26
Onion (fresh)	EG	FOB	0.8	0.8	2025-07-26

🌍 Supply & Demand: What’s Driving the Market?

• Indian government slashes procurement price by $576/tonne to $967/tonne to reflect stabilizing supplies and avoid inflation.
• Strong progress in 2025 kharif sowing and bumper summer crop arrivals support increased supply, reducing upward price pressure.
• Lasalgaon mandi wholesale prices in Maharashtra now range between $610 and $670/tonne.
• Retail prices steady at $0.36–0.48/kg nationally—much lower and less volatile than last quarter.
• Buffer stock procurement for 2025-26 has reached 250,000 tonnes, with a target of 500,000 tonnes. Agencies like Nafed and NCCF ensure continued stock-building for festive and emergency periods.
• Export demand could reintroduce volatility, but remains limited in the current environment.

📊 Fundamentals: Production, Inventories, and Trade

• India’s rabi (winter) harvest was disrupted by unseasonal rains, causing early-2025 price spikes, but the current summer harvest restored stocks and stabilized prices.
• Better storage infrastructure in Maharashtra, Karnataka, and Gujarat has reduced spoilage, further aiding market stability.
• Government intervention played a significant role in moderating prices and smoothing retail volatility.
• Onion output in key exporting countries (e.g., Egypt, Iran, and the EU) remains normal; Egypt’s fresh FOB prices at €0.8/kg are unchanged since the last report, reflecting stable export pressures.

🌦 Weather Outlook: Impact on Supply

• India: The monsoon season remains favorable for kharif onions (as of end-July 2025). Weather agencies report normal-to-above-average rainfall in Maharashtra and North Gujarat, supporting healthy crop development. No major weather threats are forecast for the next three weeks.
• Egypt: Summer growing areas report typical seasonal conditions—no stress reported for current harvest.
• Potential Risks: Minor localized flooding or pest pressure in affected states, but overall risk to national crop remains low unless monsoon shifts abruptly.

🌐 Global Production & Stock Comparisons

Country	Estimated 2025 Output (million tonnes)	Key Stockholding Agencies	Price Trend (2025)
India	~28.0	Nafed, NCCF	Down/Q2, Stable/Q3
Egypt	~2.9	Private exporters	Stable
EU	~8.7	Multiple	Slight increase
Iran	~2.2	Private traders	Slight decrease

📆 Trading Outlook & Recommendations

• Procurement price cuts in India signal an end to speculative panic; bulk buyers should increase coverage at current levels, anticipating rangebound market.
• Short-term export interest may increase if global prices rise, but no immediate spike expected.
• Monitor kharif crop development closely—any sign of adverse weather may quickly lift prices.
• Buyers for processed onion products (powder, flakes, fried) face steady EUR-denominated pricing and should lock-in current offers if risk-averse.
• Traders and importers should focus on buffer stocks management for late 2025 seasonal peaks.

🔮 3-Day Regional Price Forecast (through August 1, 2025)

Product/Market	Region/Exchange	Forecast Price Range	Sentiment
Fresh Onion	Maharashtra Mandis	$610–$670/tonne	Stable
Onion Powder	Delhi Export FOB	€1.32–€1.59/kg	Stable
Fried Onions	Poland FCA	€3.40–€3.45/kg	Stable
Fresh Onion	Egypt Export FOB	€0.8/kg	Stable