There was no immediate claim of responsibility for the blast in the Shiite Muslim neighborhood, but the Islamic State in Iraq and the Levent (ISIL) terrorist militants who seized swathes of northern and western Iraq last year, regularly send bombers into the capital.
"A refrigerator truck packed with explosives blew up inside Jamila market at around 6am (0300 GMT)," said police office Muhsin al-Saedi. "Many people were killed and body parts were thrown on top of nearby buildings," Reuters reported.
A Reuters witness at the site saw fruit and vegetables mixed with blood and body remains littering the blast crater. The market, in a northeastern suburb, is one of the largest wholesale food markets in the capital.
Abadi took office last summer following the army's collapse in ISIL's takeover of the northern city of Mosul. Security forces and volunteer groups are currently focused on routing the insurgents from the Anbar in western Iraq.