The government has reduced the minimum export price (MEP) of onion by $125 to $350 a tonne - a move aimed at encouraging outbound shipments of the kitchen staple.

“MEP of all varieties of onion, excluding Bangalore Rose Onions and Krishnapuram Onions, will be $350 per metric tonne,” the Directorate General of Foreign Trade (DGFT) said in a notification.

It has also slashed the MEP for Bangalore Rose and Krishnapuram onion by $75 to $400 per tonne.

In February, the government had lifted the ban on onion exports after farmers’ protests due to crashing of domestic prices.

It, however, capped the MEP at a higher level of $600 per tonne as a precautionary measure to control retail prices, which had shot up to Rs 70-80 per kg in December last year.

The Government had imposed a ban on export after onion prices rocketed and touched as high as Rs 80-85 per kg.

Onion exports have declined by 34 per cent to 4.52 lakh tonnes till July in the current fiscal from 6.83 lakh tonnes in the year-ago period, as per the official data.

India exports onion mainly to West Asia, Singapore and Bangladesh. Onion production for 2011-12 is estimated at 151.36 lakh tonnes, which will be higher than the last year’s production of 145.62 lakh tonnes. Onion is grown in three seasons - kharif (summer), late kharif and rabi (winter).

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