Lowering of the minimum export price for onions to $150 a tonne recently has marginally increased India’s outbound shipments of the kitchen staple, but traders feel the government should do away with the MEP completely to help the country hold sway in global markets.

“Reduction of export price to $150 per tonne has made Indian bulb competitive in the international market. Onion export from India has increased by about 10 per cent after this,” Agriculture Export Association, Mumbai, President Mr Ajit Shah told PTI.

He said exports would further gain momentum when the markets of China and Singapore open after closure for the New Year.

Mr R P Gupta, Director of the National Horticultural Research Development Foundation (NHRDF), an arm of the Indian Council of Agricultural Research (ICAR), echoed similar views.

He said the international price of onion is also in the range of $150 a tonne.

Sources in agri-cooperative Nafed said India exported 1,20,649 tonnes of onions in the month of January, 362 tonnes more than in December.

The government had slashed the onion export price to $150 a tonne on January 11, 2011, from $250/tonne earlier.

The Gulf, Sri Lanka, Bangladesh, Russia, Europe, Mauritius, China and Singapore are the major markets for Indian onions.

However, farmers associations of Pimpalgaon and Lasalgaon in Nashik district of Maharashtra, the hub of onion cultivation in the country, are not happy with the cut and want the MEP to be done away with completely.

Dilip Rao Bankar and Jaydutt Sitaram Holkar, the Chairmen of the Agriculture Produce Marketing Committees of Pimpalgaon and Lasalgaon, respectively, said the export price should be totally abolished to help the country dominate the international market.

Food and Consumer Affairs Minister Mr K V Thomas had on January 31 this year favoured either the reduction or abolishment of the minimum export price (MEP) mechanism for basmati rice and onions.

The minister had said the issue would be discussed in the meeting of an Empowered Group of Ministers on Food headed by Finance Minister Mr Pranab Mukherjee scheduled on February 7.

India is the second-largest producer of onions in the world after China.

Onion exports from India declined by nearly 23 per cent in the first nine months of the current financial year vis-a-vis the previous fiscal, mainly due to the high MEP of $250 per tonne.

China and Egypt were enjoying an edge by selling the vegetable at less than $200 a tonne.

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