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The government has done away with the minimum export price (MEP) for onions in response to falling onion prices in the domestic market.
“All varieties of onions as described above can be exported without any MEP,” a notification from the Directorate General of Foreign Trade issued on Thursday stated.
MEP is the rate below which no trader is allowed to export. The rise in MEP restricts exports and improves domestic supply.
Prices slide The Centre, on December 11, reduced the MEP for onions to $400 per tonne from $700, as falling domestic prices had led to farmer groups from Maharashtra demanding its removal. Onion prices were ruling as low as ₹11 a kg in the Lasalgaon market, Asia’s largest marketplace for the bulb, compared to ₹26 in late November.
The reduction in MEP, however, did not improve the situation with wholesale prices falling below ₹10/kg. The fall in prices is largely attributed to the almost simultaneous arrival of the kharif crop and the late-kharif crop in the market.
The Maharashtra government had recently asked the Centre to scrap the minimum export price for onions to help boost overseas shipments after wholesale prices of the bulb went down to the ₹10/kg level.
Exports may rise With removal of MEP, traders hope to export onions to markets such as Sri Lanka, Dubai and Egypt, which were so far out of reach as the prices ruling there are much lower than the earlier stipulated export price floors.
India exported 12.39 lakh tonnes of onions in 2014-15.
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