Although the onion inflation rate is 108.09%, the story this time is not just about crop shortages or reduced supply. Interestingly, the area under onion cultivation increased, there was no major problem with the crop and onion prices also started to fall in the mandis of Maharashtra. Despite this, according to government data, the inflation rate of onion has been recorded at over 108%. In such a situation, the question arises that when the crop is good and the market price is coming down, then why does onion look so expensive? To understand this question, it is very important for us to understand the difference between inflation figures, mandi prices and prices paid by a common consumer.

What is the meaning of 108% inflation of onion?

First of all, it is important to understand that 108% inflation does not mean that onion prices increased by 108% in just one month. According to Consumer Price Index (CPI) data for September 2026, the annual inflation rate of onion was 108.09%. It has been compared with the September 2025 price index. In August 2026, this rate was 48.78%.

Let us try to understand this through an example. If the price in a year is Rs. 20 to Rs. 41.62, the increase will be 108.1%. These are not actual market prices, just examples to illustrate calculations. Therefore, when understanding the inflation rate, it is important to look at the time period from which the prices are being compared.

Why onion became expensive when the crop is good?

A bad crop, damage due to rain or shortage in the market is generally considered to be the reason behind the rise in onion prices. But this time the production figures tell a different story.

These figures are based on the second advance estimate of the Ministry of Agriculture. It means that despite the increase in cultivated area, the total production has remained almost at last year’s level. This suggests that onion inflation cannot be explained by crop failure alone. It also has to be seen that at what time, in what quantity and at what price the onion from the farm reaches the market.

What changes from farm to kitchen?

Not only production but also storage, transportation and market supply play an important role in determining onion prices.

• Collection: It is not easy to preserve onions for a long time. Moisture, decay, sprouting and weight loss can affect the quantity available for sale.
• Seasonal Supply: A crop grown in one season does not satisfy the market needs throughout the year. The arrival of new crops is important at different times.
• Difference between Mandi and Retail Market: Even after wholesale market prices fall, retail prices may take time to come down.
• Transportation Cost: The cost of transporting onions from producing states to major consuming cities also affects the final price.

Therefore, even though production remains almost constant throughout the year, the quantity and price of onions available in the market at any particular time can vary greatly.

What did the government do to control the price of onion?

To control the seasonal rise in prices, the government prepared a buffer stock of onions and released onions in the market as per requirement.

• First step: Purchase of buffer stock: The government has set a target to purchase two lakh tonnes of Rabi onion for 2026-27. The purchase started from 15th May. Its objective was to provide additional supply to the market in times of need.
• Second step: Supply by rail and road: The government used rail and trucks to transport onions from producing areas to consuming cities. Kanda Express was also operated to transport onions from Maharashtra to Delhi-NCR.
• Step Three: Sale at concessional rates: Onion from buffer stock was sold at Rs 35 per kg by agencies like NAFED and NCCF. Its aim was to provide relief to consumers and increase supply in the market.

According to an ET report, the average price of onion in Maharashtra’s mandis fell till October 7 and retail prices also came down in many cities.

Prices started falling in the markets, but why did the inflation increase so much?

This is the most important aspect of the whole matter. According to the report, the average market price of onion in Maharashtra on September 16 was Rs 4,030 per quintal, which fell to Rs 3,475 per quintal by October 3. That means a drop of about 14 percent in just over two weeks.

But here it is important to understand the difference in dates. The inflation figures compare the whole of September 2026 with September 2025, when the fall in mandi prices was recorded between mid-September and early October. This means that onion prices during September may be much higher than last year and after that the current prices may also come down due to increase in new supply in the market. Both things can be true simultaneously.

What happened to potato and tomato prices?

To understand the status of onion, it is necessary to look at the potato and tomato figures as well.

Potato inflation rate of -11.50% means that its price index was lower than a year ago. Similar was the case with tomatoes. This shows that vegetable prices do not necessarily move in the same direction. Each crop has different production period, storage capacity, market arrival and demand.

What may change in onion prices going forward?

Three things will be important for onion prices in the future.

• Arrival of Kharif Onion: Market availability may improve with increase in fresh supply from states like Karnataka, Andhra Pradesh and Rajasthan.
• Maharashtra Market Prices: If wholesale prices continue to fall, then after some time it may affect the retail market as well.
• Government Buffer Stock: Whether or not the government continues to release stocks as needed, this could help reduce pressure on prices.

However, the actual price trend may vary depending on circumstances such as arrival of new crops, weather and transportation. Therefore, it is not right to say with certainty that onion prices will fall rapidly across the country.

The 108% inflation figure does not tell the whole story

Onion inflation rate of 108.09% is definitely a big increase. But to understand this, it is important to distinguish between the annual inflation rate and the current market price. This time there was no major decline in production, the area under cultivation increased and the government took steps to increase supply through buffer stocks. However, there was a big difference in September price index compared to last year.

At the same time, market prices began to fall in late September and early October. The most important question for common consumers is not what is the rate of inflation, but at what price they will get onions in the market in the coming days. The answer to this will be the arrival of new crops, changes in wholesale prices and retail prices.