Indian govt hikes minimum export price on onion to improve domestic supplies
New Delhi, July 3:
The Indian Government has hiked the minimum export price (MEP) of onion to $500 per tonne to improve domestic supply and curb exports. The domestic prices have been rising since last few weeks in anticipation of deficient monsoon rains this year so far.
About a forth-night back, the government had imposed a MEP of $ 300 per tonne on the onion exports in a bid to increase supplies in the next few months.
“Keeping in view of rising retail and wholesale prices and delayed monsoon, the Inter-Ministerial Committee– IMC had unanimously decided to fix the MEP at $ 500 per tonne – freight on board — which translates to Rs 30per kg with a view to arrest domestic price rise and augment domestic supply,” a commerce ministry statement said..
The IMC in their meeting held earlier this week had observed ‘the wholesale and retail prices of onion are going up in producing and consuming mandies and despite MEP at $ 300 per tonne there is no appreciable decline in the exports of onion,” the official statement noted.
Meanwhile, the retail prices of onion have risen to about Rs 25-30 per kg in Delhi, while the wholesale prices at Nasik, the hub of country’s onion trade is ruling around Rs 18 – Rs 19 per kg.
Onion prices have been rising in the last few weeks, due to deficit monsoon rains in key growing areas in Maharashtra, Andhra Pradesh and Karnataka.
“We have sufficient onion stocks at present, its only speculations which leading to rise in prices,” a trader from Nasik said.
The government had abolished MEP of onion in March, when the wholesale prices dropped to as low as Rs 6 – Rs 7 a kg in Maharashtra, the biggest producer of the agricultural commodity.
In December, 2013 the commerce ministry had reduced the MEP from $350 a tonne to $ 150 a tonne to boost exports and check the sharp fall in domestic prices. The MEP was imposed in September last year when the retail prices rose to Rs 80 per kg in the many of the cities.
The country exported 1.3 million tonne of onion during 2013-14 out of the total output of 19.2 million tonne.
Indian exports onion to several countries including Bangladesh, Malaysia, Sri Lanka, United Arab Emirate, Saudi Arabia, Indonesia and Singapore.
India is the second largest onion growing country globally and onions are known for their pungency and availability throughout the world globally.
“The period between July – September is a sensitive period during which onion prices rise as demand is met through stored crops from summer output,” a commerce ministry official said. The official said the purpose of MEP to ensure that domestic prices do not rise sharply like last year.
The domestic onion demand during the lean period from June – November is met through stored rabi (winter) and fresh kharif (summer) produce.
C B Holkar, board member, Nafed, and a farm leader from Nasik had cautioned against imposing MEP and said.“the government should refrain itself from imposing ban on onion exports it would discourage farmers to take up sowing in the forthcoming kharif season,”