The Government has imposed a minimum export price of $450/tonne on potatoes to prevent shortage in the domestic market and tame rising prices.

Exporters will not be allowed to ship out consignments of potatoes, both fresh and frozen, priced below $450 with immediate effect, according to a notification by the Directorate General of Foreign Trade issued on Thursday.

This follows similar restrictions imposed on onion exports last week. The DGFT had fixed an MEP of $300 on onions.

With rising food inflation, Finance Minister Arun Jaitley had announced the Government’s plans of checking prices earlier this month which included imposition of MEPs on both potatoes and onions.

Increase in prices of fruits and vegetables pushed up wholesale price index (WPI) based inflation to a five-month high of 6.01 per cent in May this year.

In May, there has been an increase of 40 per cent in the wholesale price of potatoes as compared to their prices in March, 2014.

In the same period, the retail price of potato has increased by 30 per cent. Prices have risen to about ₹25-30 a kg of potato in the national capital. The potato crop is estimated to be lower by 13 per cent compared to the previous year as hailstorm and unseasonal rainfall destroyed crops in several parts of the country. Last year, India produced 46.3 tonnes of potatoes. Annually about one lakh tonne of potatoes are exported from the country.

With the West Bengal Government stating that it would impose a ban on potato sale to other States if prices do not cool by July 8, prices may spiral in other Eastern and North-Eastern States.

The Centre has also asked State Governments to take strong measures to check hoarding of vegetables which is playing a big role in creating shortages and pumping up prices.

Jaitley has called a meeting of all state consumer affairs ministers next week to discuss ways to bring down food prices. Food and consumer affairs minister Ram Vilas Paswan will also attended the meeting.

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