The Centre is likely to lower or scrap the minimum export price (MEP) for onions in response to demands by farmer groups for its removal, from States such as Maharashtra and Karnataka, as domestic prices have fallen significantly over the last month.

“The inter-ministerial committee (IMC) on onions is discussing the issue and a suitable measure will be notified very soon,” a government official told BusinessLine .

MEP is the minimum price below which exports can’t take place. While farmers are demanding that the MEP be scrapped, the Centre is looking at whether it is prudent to remove it at one go, or do it in phases. “The IMC will soon take a call on this,” the official added. The MEP for onions was increased to $700 per tonne in August from $425 per tonne, as domestic prices had spiralled due to unseasonal rains, affecting crops in some parts of the country. Following the increase in MEP, exports of onions almost stopped as it became unviable to export the commodity at such high prices.

Huge supply

“Domestic prices of onions are now down for the last few weeks. Since Kharif crop has started coming in, huge arrivals in the local market is depressing prices,” the official said.

Onion prices are ruling as low as ₹11 per kg in the Lasalgaon market as compared to ₹26 per kg in November.

The inter-ministerial group on onions is headed by officials from the Commerce Ministry and includes representatives from the ministries of agriculture and consumer affairs.

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