Govt mulls raising export price of onions to $475/ tonne

To curb exports of onion and improve its supplies in the domestic markets, the government is contemplating increasing the minimum export price (MEP) of onions by almost $175 per tonne to $475 per tonne, but it may not immediately ban onion exports.

At present, the MEP is pegged at $300 per tonne after it was raised by $25 per tonne on August 24. The hike, the fourth since June 18, was done as the retail price of onion started rising because of delay in sowing of kharif crop in Maharashtra, the country’s largest onion-growing state and also hoarding by farmers, analysts said.

Officials said the government is now mulling the option of further raising the MEP as retail prices are still high, but could stop short of banning exports as it could hurt the interest of growers.

If the MEP is hiked by $175 per tonne, it should go a long way in curbing exports as effectively it would mean that any onion, priced below Rs 22 and Rs 23 per kilogram (assuming dollar rate is Rs 46) will not be allowed to be exported. At current rate, the MEP of onions is Rs 13-14 per kilogram.

On Monday, consumer affairs minister K V Thomas chaired a meeting with senior officials attached with his ministry and also others to review the onion price situation across the country.

Following the meeting, the government on Monday said National Agricultural Cooperative Marketing Federation (Nafed) and National Cooperative Consumer Federation of India (NCCF) will sell onions at Rs 20 per kilogram through their retail outlets in Delhi.

“The state governments have also been asked to undertake such market intervention measures through their respective agencies,” an official statement said.

Thomas has also directed all officials to keep a close watch on the price situation and take other appropriate measures like discouraging export, if required.

The meeting was attended by secretary, consumer affairs, Rajiv Agarwal, managing directors of Nafed and NCCF besides others. The consumer affairs ministry will also review the price situation on a fortnightly basis and keep the committee of secretaries abreast of the development.

On Tuesday, Thomas also held a meeting with his counterpart in the commerce ministry to mull various measures to check price rise.

Onion prices have moved up sharply in the last few months. In Delhi, retail price of onion has moved up by over 26 per cent since August 1 and was selling at around Rs 21.5 per kilogram on Monday, a department of consumer affairs data showed.

In Mumbai, the price has moved up by Rs 3 per kg during the same period, while in Chennai it has gone up by Rs 5 per kg during the same period.