Onion export ban may go next week

Under pressure from farmers and political parties alike, the central government is likely to lift the ban on export of onions by 20th of this month.

The decision to impose a ban was taken by an empowered group of ministers (eGoM) on September 9, after retail prices rose sharply in some cities because of the delayed harvest of the kharif crop.

Officials said the price had since normalised and, more important, the interest of farmers is getting affected by the ban. It is unclear if the minimum export price (MEP) is to be kept as it is or raised further. The ban came just a day after the directorate general of foreign trade raised the MEP by $175 a tonne to $475 a tonne

Traders in the wholesale markets of Nashik in Maharashtra, the country’s largest market for trading onions, have been on strike since the ban was announced. A delegation of senior ministers from Maharashtra, the country's largest producing state, had met the Union food minister, among others, to demand lifting of the ban. The state chief minister had urged likewise.

Earlier this week, agriculture minister Sharad Pawar is believed to have met Prime Minister Manmohan Singh to apprise him of the situation. Officials in his ministry believe the decision to ban exports was not justified. “There was not enough time given to see the impact of raising the MEP,” they said.

Pawar and food minister K V Thomas had said the ban would be reviewed in the next eGoM meeting. “There is no shortage of onions, as production this year is more than supply,” Pawar had told reporters after a meeting to review agriculture production prospects in the coming rabi season.

Data from the department of consumer affairs showed the price in some wholesale markets had dropped by Rs 100-325 per quintal since September 9. India's onion production is estimated at 15.13 million tonnes in 2011-12 (July-June), higher than the previous year's 14.56 mt. Maharashtra is followed by Gujarat, Uttar Pradesh, Orissa, Rajasthan, Madhya Pradesh and Karnataka.