Govt slashes MEP of onions by 25%

In what would bring cheer to exporters complaining that a higher minimum export price (MEP) of onions discouraged exports, the government has slashed the MEP of onions by 25 per cent, from $600 per tonne to $450 per tonne.

“The minimum export price of onions other than Bangalore rose onions and Krishnapuram, will be $450 per tonne freight on board,” the Directorate General of Foreign Trade said. Last month, the government had lifted a ban on onion exports after prices crashed, leading to widespread protests by farmers, especially in Maharashtra. However, the removal of the ban came with a $600-per-tonne MEP to check any unusual flare up in domestic prices.

Onion exports were banned after retail prices soared by more than Rs 20-30 per kilogram in December because of damage to standing crops. Agriculture minister Sharad Pawar had said the MEP of $600 per tonne was almost double the prevailing rate in international markets, rendering Indian exports uncompetitive.

Onion production in the country is likely to be around 10.5 million tonne in 2010-11, down from 12 million tonne last year.

The Directorate General of Foreign Trade —- the commerce ministry’s arm that deals with matters related to exports and imports —- said three varieties of rice (Sona Masuri, Ponni Samba and Matta), whose exports were allowed last month, would be subject to port restrictions. The export of ‘Sona Masuri’ was allowed from the ports in Chennai and Vishakhapatnam, with a cap of 50,000 tonne from each.

The export of ‘Ponni Samba’ from the Tuticorin port and the export of ‘Matta’ from the Cochin port were both capped at 25,000 tonne.