Onion Prices Approach 100 Rupees per Kilogram: What’s Driving the Persistent Rise?

The price of dried onions, commonly used in street snacks and home kitchens, has surged by 40 percent within a month from New Baneshwor to Budhanilkantha, reaching 77 rupees per kilogram. In Kalimati, retail onion prices have climbed to 90-100 rupees per kilogram, with traders predicting prices could exceed 150 rupees per kilogram by the time of Dashain. During the current fiscal year’s month of Shrawan, Nepal imported 17,518,569 kilograms of onions from India, spending over 7.18 billion rupees.

On July 21 in Kathmandu, Parvati Thapa, who makes her living selling street snacks in New Baneshwor, is currently worried about the rising cost of dried onions, an essential ingredient she uses daily. As onion prices continually rise, her business is under strain. To cope, Parvati has reduced the amount of onion in her ‘chatpate’ and ‘pani puri’ dishes for over a month.
“I used to buy dried onions at 60-70 rupees per kilogram, but today it hit 100 rupees in the morning,” she said. “This directly affects my business since customers say the snacks don’t taste good with less onion. We have to keep customers satisfied, but if prices keep rising, how will I manage?”

While homes are gearing up for festival celebrations, consumers like Laxmi Shrestha, a housewife in Budhanilkantha, are also forced to cut back on onion usage in their cooking. Laxmi said, “I only add onions when cooking meat and use very little in pickles. I’ll buy more if prices come down.”

According to the Kalimati Fruit and Vegetable Market Development Committee, onion prices have uncharacteristically inflated in the past month. At the end of Ashad, wholesale prices averaged 54 rupees per kilogram in Kalimati, rising to 55 rupees by July 21. Prices then rapidly increased, reaching 62 rupees by July 31 and 77 rupees (minimum 75, maximum 80) by August 22. This significant jump reflects the heavy burden on consumers, with prices rising 22 rupees per kilogram — a 40 percent increase in one month. Year-on-year, wholesale prices have climbed from an average of 46 rupees last Shrawan to 77 rupees, marking a 65 percent increase.

Following wholesale price hikes, retail prices have correspondingly risen, affecting consumer budgets. Currently, in the retail market, dried onions sell for 90 to 100 rupees per kilogram. A survey of ten vegetable shops across Kathmandu found prices at 90 rupees in some stores and 100 in most others. Supermarkets, including Big Mart, have priced onions around 99 rupees per kilogram. According to a vegetable trader from New Baneshwor, “We buy onions at 80 rupees per kilogram in Kalimati, and retail prices are 5-10 rupees higher.” Wholesale traders anticipate prices could reach over 150 rupees per kilogram by Dashain.

Businesspersons attribute the local price hike to shortages and price increases in the Indian market. Since Nepal depends on India for about 98 percent of its onions, price increases there directly impact the Nepali market. Prakash Gajurel, General Secretary of the Nepal Potato and Onion Business Association, explained shortages result from low production and high demand in India.
“Onion prices have gone up in India due to scarcity. Being fully dependent on Indian supplies, prices here have naturally risen,” he said. Import costs – termed ‘landing costs’ – from India now exceed 75 rupees per kilogram. Demand spikes as festivals approach worsen the situation. Delays in supply, poor weather conditions, and increased demand in both countries are factors intensifying price hikes.

Minimal domestic onion production and reliance on Indian imports have historically caused shortages and price surges. Gajurel predicts wholesale prices might soon surpass 100 rupees per kilogram, noting past occasions when prices soared beyond that threshold caused market panic.
Although India has officially placed export restrictions on onions, traders claim that supplies remain uncertain and strict indirect controls are in place. Gajurel warned that when supply from eastern regions is weak or political relations sour, India could impose direct export bans again.
“While direct bans are not currently active, indirect restrictions have tightened,” he explained.

To prevent shortages and stabilize prices, traders have urged the government to initiate government-to-government (G2G) onion supply arrangements. During recent discussions with the Kalimati Market Development Committee, Gajurel stressed the need for timely government intervention.
“There’s a significant risk that prices will rise even further, so the government must act to facilitate G2G supply,” he emphasized.

Price hikes in India have been dramatic: Retail onion prices increased by about 40 percent in just one week across major cities such as New Delhi, Mumbai, and Kolkata, reaching 50 to 60 rupees (roughly 80 to 96 Nepalese rupees). In Bhubaneswar, Odisha, prices nearly doubled within two days to 60 rupees. Delays in transportation and vegetable supply due to heavy rainfall, late arrival of new crops from southern India, depletion of old stocks, and increased festival demand in Maharashtra’s Lasalgaon mandi have been cited as key causes. Indian media reports that the government plans to release buffer stocks of subsidized onions into retail markets soon.

Meanwhile, consumer rights activists accuse traders of artificially creating shortages to spike prices ahead of festivals. Madhav Timalsina remarked, “Merchants tend to hoard onions before festivals. A sudden 40 percent price hike is not surprising.” He added, “Both local and federal governments’ failure to regulate markets leaves consumers perpetually disadvantaged. Prices have increased recently as well.”

Currently, Nepal’s Kalimati market imports dried onions exclusively from India. In the month of Shrawan alone, the country imported approximately 17,518 tons valued at 7.18 billion rupees under the fiscal year 2083/84 (2023/24), with customs revenue collection reaching 646.7 million rupees.