Indian govt imposes minimum export price on onion, potato exports on watchlist

Indian govt imposes minimum export price on onion, potato exports on watchlist

Indian govt imposes minimum export price on onion, potato exports on watchlist
Our bureau
New Delhi, June 19:

The Indian government has imposed a minimum export price (MEP) of $ 300 per tonne on the onion exports in a bid to improve domestic supplies in the next few months. This is expected to keep onion prices stable and help the government in dealing with rising inflation graph.

Official sources said the government would consider imposing MEP on potato exports as well shortly.

A senior government official said that although the country has sufficient onion stocks to meet the domestic demand till September when kharif crop enters the market, the imposing MEP was imperative to ensure that only high value shipment is allowed.

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.

“Export of all varieties of onions will be subject to a MEP of $ 300 per tonne,” the Director General of Foreign Trade (DGFT) said in a statement.

The country exported 1.3 million tonne of onion during 2013-14 (April-March) 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 its onions are known for their pungency and availability throughout year 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.

Increase in essential food items like vegetables, fruits and cereals, have pushed up the wholesale price index based inflation to five-month high of 6.01% on May.

At present at the wholesale market of Nasik, the hub of onion trade, the prices are ruling in the range of Rs 1200 to Rs 1300 per quintal while in the Delhi, the wholesale price of onion is reported at around Rs 1400 to Rs 1500 per quintal. The retail onion prices have been in the range of Rs 18 to Rs 25 per kg across the country.

“Prices have increased marginally because of storage cost and its natural at this point of the year,” RP Gupta, Director of Nasik based National Horticulture Research and Development Foundation said. He also said there are sufficient stocks of onion to meet the domestic demand.

Gupta noted that out of the total output of summer crops close to 3.5 million tonne of onion have been stored which would is currently being used for meeting the demand in the next few months. Summer crops contribute close to half of the the country’s onion output and its stored for few months.

Meanwhile, C B Holkar, board member, Nafed, and a farm leader from Nasik on Monday 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,”

Onion is predominantly a rabi or summer crop as it is grown throughout the country during the season, while in kharif season is is mainly grown in Maharashtra, Karnataka, Gujarat, Rajasthan and Andhra Pradesh.

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