Government today reduced minimum export price (MEP) of onion to USD 150 a tonne from USD 350 to boost shipments and check sharp fall in domestic prices that has led to farmers protest in producing states.
This is the third downward revision of onion MEP, the benchmark price below which the commodity can not be exported, this month. On December 16, the Centre had reduced it to USD 800 a tonne from USD 1,150 a tonnes and just three days after that MEP was slashed to USD 350 a tonne.
"Exports of all varieties of onions...will be subject to a MEP of USD 150 per tonne," the Director General of Foreign Trade (DGFT) said in a notification.
The decision comes a day after Agriculture Minister Sharad Pawar met Commerce Minister Anand Sharma on issues related to the sharp decline in wholesale onion prices in Maharashtra and the need to review the MEP. Earlier Pawar had also written to Sharma to scrap the MEP.
Wholesale prices in Lasalgoan market, Asia's largest onion market, have crashed below Rs 10 a kg from Rs 60 in September while in retail markets rates have fallen from Rs 100-level to Rs 20-25 a kg.
With wholesale prices declining sharply due to bumper crop, farmers in producing states like Maharashtra have been protesting with demand for removal of export restrictions.
The government had imposed MEP on onion in September and then it was raised several times to curb exports and boost domestic supplies as retail prices had shot up as high as Rs 100 per kg in major parts of the country. The country had to even import onion to control price rise.
MEP reduction has helped in checking exports, which fell 8.53 lakh tonnes (LT) during April-November period of this fiscal against 18.22 LT in the same period in 2012-13.
India produces around 17-18 million tonnes of onion a year. It is an essential kitchen staple and also a politically sensitive commodity.
In an official statement, the government said that an inter-ministerial committee on onions would closely monitor arrivals, wholesale and retail prices in the country.
The government would intervene to ensure price stability and adequate domestic availability of onions along with price protection with a view to balance the interests of both farmers and local consumers.