The Empowered Group of Ministers (EGoM) revoked the ban on onion exports on Tuesday. However, it retained the minimum export price (MEP) of $475 a tonne that was fixed on September 4, three days before the ban was imposed.

The ban has been lifted mainly in view of the agitation by farmers in Maharashtra. They have not been bringing their produce even since the ban was imposed on September 7. As a result, most of the Agricultural Produce Marketing Committee (APMC) yards have been closed indefinitely.

The ban was imposed to check surging onion prices that hit almost Rs 1,300 a quintal before the ban. However, it served little purpose as prices shot up further to Rs 1,500 a quintal.

Farmers had boycotted the markets, saying the ban had led to a fall in prices that were lower than the cost of production.

With the Union Finance Minister, Mr Pranab Mukherjee, indicating that Tuesday's EGoM would lift the ban, there was some respite in onion prices. On Tuesday, the modal price, or the rate at which most trades took place, dropped to Rs 1,200 from Rs 1,250 on Friday at the Pune APMC.

The EGoM also finalised a revised open market scheme (OMS) for wheat and rice. On the other hand, it has extended the period for stock holding limit in case of sugar, pulses, edible oil and oilseeds.

Briefing reporters, the Minister of State (independent charge) for Consumer Affairs, Food, and PDS, Prof K.V. Thomas, justified the decision to revoke the ban on onion export by saying that prices were stable. However, onion cannot be exported below the price of $475 a tonne. This floor export price will be reviewed every week and any change will be made accordingly, Prof Thomas said.

The EGoM decided to extend the stockholding limit for sugar by two months till November 30. “This has been done keeping festival demand in mind. This will also help to keep a lid on prices,” Prof Thomas said. The Government expects sugar production to touch 240-245 lakh tonnes. With some exports expected to take place and no arrivals seen in October, the EGoM decided to extend the stockholding limit, the Minister said. The EGOM also approved the extension of stock limit for pulses, edible oil and oil seeds till September 30, 2012.

Revised Scheme

To check prices in the market, the EGoM finalised a revised scheme for wheat and rice sale in the open market. The allocation will be same but not the prices, Mr Thomas said. The new scheme will come into operation from October 1.

The allocation for the wheat and rice will be 10 lakh tonnes each. Earlier, the Government used to sell to the States at a price consisting of MSP and freight charge. This ranged from Rs 1,098 to Rs 1,590 a quintal Now there will no freight charge for the States and only MSP will be realised at Rs 1,170 a quintal. However, for traders there will be freight charge at 50 per cent. So, price range for traders would be Rs 1,170-1,425 a quintal.

On the other hand, the allocation price for rice will be Rs 1,492.50 against previous average price of Rs 1,541.07

> Shishir.s@thehindu.co.in