The Government on Thursday hiked the minimum export price for onions to $900 a tonne, from $650 a tonne as part of its strategy to curb rising prices.
However, onion prices continued to move upward across key wholesale markets, indicating no immediate respite for consumers across the country.
The prices of bulb are rising despite the increase in crop arrivals, mainly in Bangalore.
Onion is currently being harvested in Karnataka and Andhra Pradesh, where the recent rains had hit transportation.
The Directorate General of Foreign Trade issued a notification on the hike in the floor price.
Trade sources said that the hike in export price floor would not mean much as Indian shipments are unviable at current prices.
However, the Government’s latest move could help improve the market sentiment.
The latest hike in floor price for onion exports is the second such instance where the Government has tried to curb overseas shipments. On August 14, the Government had imposed a floor price of $650.
As a result of the minimum export price and the rise in domestic prices, onion exports had slowed down considerably in August.
Shipments in August were 29,247 tonnes, a sharp drop from 1.56 lakh tonnes in July. In value terms, exports in August stood at Rs 125 crore, down from Rs 439 crore in July.
Total shipments in the first five months (April to August) of the current fiscal were estimated at 6.97 lakh tonnes, valued at Rs 1,341 crore. In the corresponding period last year, exports were over 8.5 lakh tonnes valued at Rs 842 crore.
Meanwhile, arrivals in the Bangalore market, currently the largest in terms of volumes handled, were up at 6,151 tonnes, about 17 per cent higher than Wednesday’s 5,258 tonnes.
Despite the increase in arrivals, the modal price or rates at which most trades took place inched up to Rs 4,000 a quintal from Rs 3,900 on Wednesday.
Similarly, in Hyderabad, the arrivals were up at 980 tonnes from Wednesday’s 727 tonnes.
However, the prices in Hyderabad softened to Rs 3,000 a quintal from Rs 3,500 a day earlier. However, in markets such as Delhi, Lasalgaon and Pimpalgaon, prices eased marginally on Thursday.
Earlier in the day, Agriculture Minister Sharad Pawar said that onion prices would ease in the next two to three weeks on higher arrivals in Maharashtra and other States.