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Informist, Monday, Aug. 25, 2025

 

By Pallavi Singhal

 

NEW DELHI – Prices of onion have remained stable in India over the past couple of months but the recent decision by Bangladesh to lift curbs on imports from India could lead to nothward movement in prices in the coming weeks. Ample domestic stocks may somewhat temper the impact, but it is the scale and pace of Bangladesh's purchases that will play a critical role, Pushan Sharma, director at Crisil Intelligence points out. 

 

Bangladesh is the largest buyer of onions from India with over 40% share in Indian exports. Dhaka has allowed imports of the bulb during Aug. 14 to Dec. 13 as prices of the commodity rose in the neighbouring country.

"Since exports have only recently resumed, initial consignments are limited... Should procurement pick up meaningfully, retail prices may strengthen for both premium grades and regular grades in the coming weeks," Sharma said. At the benchmark Lasalgaon mandi of Nashik in Maharashtra, onion prices were hovering between INR 1,400–INR 1,900 per 100 kg depending on the quality of the bulb. Retail prices, as per the consumer affairs ministry, stood at INR 27.37 per kg as of Monday.

 

While prices are seen rising, what may cushion the impact is ample availability of rabi stocks in India. "Any escalation in onion prices is likely to be gradual rather than sharp on ample rabi stocks and steady supplies," Sharma said. India has seen a rise in onion production this past year, with rabi onion output in 2024-25 (Jul-Jun) expected at 22.7 million tonnes, up 18% on year, as per government estimates. 

 

Additionally, kharif onion production is also projected to rise in the ongoing season, supported by higher acreage in key producing states like Maharashtra and favourable early-season rainfall. With higher acreage, Crisil Intelligence estimates kharif onion production to also rise by 1-3%, providing further cushion in case prices rise. Another factor which may help rein in prices would be the government's procurement of 300,000 tonnes of onion this season, to be offloaded when prices generally go up during Sep-Nov -– the lean season between rabi and kharif crops. 

 

However, risks such as recent heavy rainfall in Maharashtra, which accounts for 30% of total kharif onion output, may affect the crop in its early vegetative stage. Maharashtra has seen recurrent heavy showers in districts like Nashik that has recorded 103?ove long period average rainfall and Pune at 132?ove long period average, while Karnataka reported significant excess rains in Chitradurga at 154?ove long period average and Bijapur at 242?ove normal, Crisil Intelligence said. "These conditions have triggered localised concerns, including moderate yield stress and fungal incidence. While such developments have created scattered challenges, they are not yet expected to materially alter the broader production outlook," Sharma said.

 

Sharma warned that excessive moisture at this stage could aggravate incidence of disease, cause bulb damage, and affect both quality and storability. "The India Meteorological Department's forecast suggests continued rainfall activity in parts of Nashik and Pune, making the next few weeks decisive in shaping the final crop outcomes."

 

STORAGE LOSSES

Pushan said heavy rainfall in Maharashtra and Karnataka in August has also caused localised damage to stored onions, with the extent of damage dependent on future rainfall patterns. Storage losses, he said, remain a persistent vulnerability in India's onion supply chain, particularly for the rabi crop, which contributes to over 65–70% of annual production and is stored for lean-season use. "In 2025, pre-monsoon showers in May damaged stored onions in parts of Nasik for farmers opting for storages like Kanda Chawls," Sharma said.

 

"This underscores the need for improved scientific storage interventions along with targeted government support to stabilise farmer incomes against onion storage losses," he said.

 

OUTLOOK

With onion prices currently stable, only moderate firmness is expected in the medium term, supported by retail demand and export flows to markets like Bangladesh, Sharma said. While government reserves can temper prices at the wholesale level, supply–demand fundamentals especially kharif harvest and export dynamics will remain the primary price determinants, he said. Hence, the current procured stock by the government agencies may be seen as a stabiliser rather than a decisive factor in market pricing, he added.  

 

India produces 28-30 million tonnes of onion annually. The country is among the world's largest producers of the crop, with rabi onion accounting for majority of the country's total production. It shipped 2.5 million tonnes of the bulb in 202324 (Apr-Mar) with 671,125 tonnes sold to Bangladesh alone, data from commerce ministry showed. In December 2023, India imposed a complete export ban amid rising domestic prices. In May 2024, it lifted the ban but introduced export duty, minimum export price, rendering exports ineffective. India removed its 20% export duty on onions, effective Apr. 1, 2025.  End

 

Edited by Vandana Hingorani

 

 

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