Production dynamics, price transmission and market integration analysis of onion (Allium cepa L.) in India

Abstract

This study examines the production dynamics, price behaviour and market integration of onion using national level production statistics (1984-85 to 2024-25) and state level monthly wholesale price data (2005-06 to 2025-26) for major onion producing and consuming states. The findings reveal that growth in onion production in India has been largely led by area expansion with limited yield improvement over time. Price analysis further indicates upward trend across states with high volatility and pronounced seasonal patterns where prices peak during lean supply period. Market integration analysis confirms the existence of long run relationship among states, whereas vector error correction model and Granger causality results, highlight leader follower structure with Maharashtra emerging as dominant price discovery centre. Divergent adjustment observed in Delhi and Punjab further suggests that price shocks tend to persist in consumption states due to demand pressure and supply rigidities. Impulse response and variance decomposition analysis confirm strong influence of Maharashtra in shaping price movements across the states. The findings highlight the need to shift from area-led to productivity-driven growth through investment in region-specific high yielding varieties and strengthening of seed systems along with establishment of regional market hubs to reduce price volatility. The study also indicates strong potential for expansion of Kharif onion production in Punjab to support diversification and enhance farm incomes.