Onions Have Doubled Again. Why Does This Keep Happening?

In September, onions cost more than twice what they did a year earlier. My mother says this happens every few years. She is right.

The numbers

September’s retail inflation jumped to 5.54%, from 4.83% in August. Food inflation reached 7.74%, and onions were the standout, up more than 100% on a year earlier. The monsoon this year has been the weakest since 2009, running about 15% below normal by mid-September, and onion crops in Maharashtra and Karnataka were badly affected.

My mother remembers onion prices causing trouble in 2013, 2019 and 2023. Each time, prices shot up for a few months, the government stepped in, and then they fell back. I wanted to understand why one vegetable keeps doing this.

Why onions are different

Onions are grown in a few states, mostly Maharashtra, Karnataka and Madhya Pradesh, so bad weather in one region affects national supply. They are harvested in specific seasons and must be stored for months to cover the gaps. Storage is limited and much of it is basic, so a large share of the crop rots. And Indian cooking uses onions in almost everything, so demand barely falls when prices rise. Economists call that inelastic demand.

Put those together and you get a market where a small drop in supply causes a large jump in price. If supply falls by 15% and people still need roughly the same amount, prices have to rise a lot before enough buyers cut back. That is exactly what happened in September.

What the government does

The government keeps a buffer stock of onions for moments like this and sells them at subsidised prices through cooperatives and mobile vans. It has done that again this year. In past episodes it has also restricted exports to keep more onions in India, which helps city consumers but angers farmers who lose access to better prices abroad.

These measures treat the symptom. The deeper fix is better cold storage, more spread-out growing areas and faster transport, so that one weak monsoon in one region does not become a national price shock. Until that happens, onions will keep doing what my mother says they do. The cycle is predictable, which is exactly why it is frustrating that it still catches us by surprise.