Chennai Koyambedu Onion Prices Rise 71%: Traders Warn of ₹100 Per Kg

Onion prices at Chennai’s Koyambedu wholesale market have surged by 71% since the beginning of August, raising concerns that prices could reach ₹100 per kg during the upcoming festival season.

According to traders, the wholesale price increased from ₹35 per kg on August 1 to ₹60 per kg on August 25. The sharp rise has been linked to supply shortages, unseasonal rainfall and disruptions in major onion-producing regions.

Onion Supply to Koyambedu Falls by Half

Traders said the Koyambedu market was previously receiving around 1,400 tonnes of onions every day from Maharashtra, Karnataka and Andhra Pradesh. However, arrivals fell to only around 700 tonnes on Tuesday.

SS Muthukumar, president of the Koyambedu Semi-Wholesale Vegetable Traders Association, said the reduction in supply has contributed significantly to the price increase.

Traders have also urged the Tamil Nadu government to intervene by procuring onions from producing states and making them available to the market, as governments have done during previous supply shortages.

Why Are Onion Prices Rising?

The current price increase has been attributed to several factors, including:

- Unseasonal rainfall in Maharashtra

- El Niño-related weather conditions

- Crop and harvesting damage

- Lower onion production in key producing states

- Delayed monsoon and kharif crop arrivals

- Reduced arrivals from major markets such as Nashik and Kurnool

- Increasing demand ahead of the festival season

The disruptions have affected the normal supply cycle between the rabi and kharif crops.

National Onion Prices Also Increase

Department of Consumer Affairs data shows that the national average retail onion price has reached around ₹42 per kg, representing a rise of about 19% from July and 45% compared with last year.

In Chennai, onions were reportedly selling at around ₹33 per kg last year. Wholesale prices have also increased substantially compared with the previous year.

Government Takes Steps to Increase Supply

The Central government has increased its onion procurement price to ₹26.45 per kg to encourage procurement and strengthen supplies.

However, rising prices in Nashik reportedly affected procurement levels, making it difficult to achieve the government’s target of 2 lakh tonnes.

To improve supply to major consumption centres, the government has also started transporting onions frorom Nashik through special ‘Kanda Express’ trains to cities including Chennai, Delhi, Kochi and Guwahati.

Onion Prices May Remain High

With demand expected to increase during the September–October festival season, traders at Koyambedu market expect onion prices to remain elevated until fresh supplies from the new kharif crop begin to arrive.

If supply shortages continue, traders have warned that Chennai onion prices could rise further to ₹80 per kg or even ₹100 per kg.