Government lowers minimum export price of onion to $350 per tonne

The government has lowered the minimum export price of onions to $350 per tonne from the $800 per tonne fixed earlier, following a drop in onion prices at major production centres in the country.

An inter-ministerial committee headed by joint secretary in the department of commerce today announced the decision to lower MEP on onion on Thursday.

The committee is chaired by managing director of NAFED, while the joint secretary in the department of agriculture and cooperation and economic advisor to the department of consumer affairs are its members.

This committee takes stock of the arrival of onion and modal prices prevailing in the important production and consumption centres and decides the MEP of onion accordingly fixes the MEP.

The committee had, on the basis of an improvement in onion arrivals in the latter half of November and the first week of December 2013, decided to reduce the MEP to $800 per tonne at its meeting on 10 December 2013.

''Now that the arrivals have shown marked improvement and on the expectation of better crop prospects and the sharp decline in the wholesale modal prices in production mandis of Maharashtra and other places, it has now been decided by the government to slash the MEP to $350 per tonne with immediate effect,'' an official release said today.

Government expects the move to boost export of onions and in turn assure remunerative prices to farmers and help stabilise onion prices in the domestic market.

Government hiked the minimum export price of onion in the wake of a sudden spurt in onion prices starting from July 2013. The high prices continued through August, September, October and November.

The price spike has been due mainly to issues like untimely rains, supply constraints, less than expected production, initial speculative hoarding activities by unscrupulous traders, overall food inflation etc.

The government raise MEP on onion to $650 per tonne on 14 August 2013, Since then it has hiked onion MEP to $ 900 per tonne on 19 September 2013 and to $1,150 per tonne on 1 November 2013.

Onion prices, however, have been holding high all these months and have started decline in recent weeks due to increased domestic supplies.