The Government has cut the minimum export price (MEP) of onion further to $125/tonne, but trade sources said the move will not be of much help as the current season is coming to an end.
“The MEP of all varieties, excluding Bangalore Rose Onions and Krishnapuram Onion will be $125/tonne,” the Director General of Foreign Trade (DGFT) said in a notification late Wednesday. The exports of all premium varieties like Bangalore Rose and Krishnapuram will continue to be at $250/tonne, it said.
This is the second such instance in recent weeks where the Government has reduced the MEP to boost the slowing exports. In January, the MEP was reduced to $150/tonne from $250/tonne.
Onion exports which doubled from Rs 1,035 crore in 2007-08 to Rs 2,319 crore in 2009-10 have since slowed down on higher MEP. In 2010-11, the exports stood at Rs 1,741 crore.
“While the reduction in MEP is intended to help boost exports, it would not help much as the current season is coming to an end. If the MEP was reduced earlier, it could have helped exports,” said Mr Rupesh Jaju, Director of United Pacific Agro Ltd.
“Moreover, the onion that's currently coming into the market has a low shelf life as we are towards the end of the season,” Mr Jaju said. The new season would begin sometime in March, he added.
India is the second largest producer of the onions, which are known for their pungency. Bangladesh, Malaysia and Sri Lanka are the top three markets for the Indian onion exports.