Spike in onion prices likely to persist as drought hits Karnataka cultivation

Onion prices are anticipated to stay elevated, even though government buffer stocks are being sold at a reduced rate of ₹35 per kilogram. The primary reason for this price hike is the significant decrease in kharif onion cultivation in Karnataka this season, according to Satish Bhonde, an expert and former additional director of the research institute NHRDF.

The reduced acreage indicates a potential supply constraint until the next rabi-grown onion arrives in the market from April next year. Bhonde explained that this delay is due to inadequate rainfall, causing a delay in sowing and transplanting, which is already reflected in the wholesale price reaching ₹40 per kilogram. In Karnataka, the total area under kharif onion cultivation has decreased to 1.30 lakh hectares, compared to 2.06 lakh hectares in the previous year.

While farmers in Maharashtra and Madhya Pradesh have maintained their acreage, Karnataka has experienced a substantial drop, primarily due to water scarcity. The state government has declared drought in 101 talukas out of 239, and more may be added to the list. Rajasthan is also expecting a late kharif crop sowing to begin soon, with potential acreage reaching 40,000 hectares this year due to high prices.

These four states are major producers of onion in the kharif season. Although India's onion acreage increased to 20.14 lakh hectares in the 2025-26 crop year from 19.68 lakh hectares in the previous year, production remains stagnant at 30.74 million tonnes. Currently, all-India retail prices of onion range from ₹23/kg to ₹87/kg, with an average of ₹50/kg.

The export of onion during the current fiscal (April-June) was 3.71 lakh tonnes worth $82.12 million, compared to 3.63 lakh tonnes worth $93.12 million in the same period last year. Officials do not attribute the price rise to higher exports, emphasizing the need for adequate availability.