Govt increases onion mep by $50/tn to beef up supply

A government agency official today confirmed India has raised the minimum export price (MEP) of onion by $50 a tonne for all destinations to discourage exports and curb price spiral in the commodity.

“We have increased onion MEP because we wanted to discourage exports and maintain enough supplies in the market in order to bring down high domestic prices,” an official of National Agricultural Cooperative Marketing Federation of India (Nafed) said today.

With the latest revision, the average MEP for West Asian nations is $505 a tonne for containerised cargo and $500 for break bulk cargo, the official said.

Retail onion prices in Delhi are ruling at Rs 23-25 a kg, as against Rs 15 in September, while wholesale prices in Delhi’s Azadpur market have touched Rs 1,450 a quintal, as against Rs 1,000 three months ago.

In October, Nafed, the nodal agency to monitor exports and maintain demand-supply equilibrium in domestic market, had hiked the MEP by $85 a tonne followed by a $145 increase in November to a record high range of $450-475 a tonne for West Asia, Singapore, and Sri Lanka.

Earlier this month, Nafed had made a small hike of $5 a tonne after nearly 50 per cent fall in onion exports in November. However, domestic prices remain very high due to a sharp fall in arrivals.

Nafed, alongwith 13 other agencies involved in onion export, decides the MEP every month.

No export can take place below the MEP and all contracts are registered with the Nafed. India has exported 991,000 tonnes of onions in the first half of 2009-10 against 915,000 tonnes a year ago.