Govt lifts onion export ban

Shipments to be allowed at a minimum export price of $600 a tonne.

The government on Thursday lifted a two-month ban on onion exports after prices crashed in the wholesale markets, prompting farmers to take to the streets.

However, shipments of onion would be allowed at a minimum export price of $600 a tonne (almost Rs 28,000) to prevent any possibility of prices shooting up again, a senior government officials said after a meeting of the empowered Group of Ministers (eGoM) here on Thursday.

Business Standard had reported on Wednesday that the agriculture ministry had forwarded a proposal for opening up export of all varieties of onion with a floor price of $600 a tonne.

The government had banned onion exports in the last week of December 2010 to augment domestic supply and contain rising prices, which had touched Rs 70-80 a kg.

To dissuade onion exports, it had raised the MEP from $525 a tonne to $1,200 tonne. Later, the exports were banned.

Earlier, this month, the government had cleared export of two varieties of onion, which are largely grown in Karnataka and Andhra Pradesh. Prior to the ban, India exported 1.16 million tonnes onions, mainly to gulf countries, Sri Lanka and Malaysia during April-November of this financial year.

The eGoM meeting was attended by Defence minister A K Antony, Home Minister P Chidambaram and Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia.

Onion prices in most wholesale and retail markets across the country crashed after the government stopped exports, launched a nation-wide crackdown on hoarders. Prices also fell because of arrivals of fresh crop in Maharashtra, the country’s largest onion growing state.

At present, the wholesale price of onion in the Nashik markets has crashed to almost Rs 4 a kg. Last week, the government had lifted the export ban on two varieties of onions—Bangalore Rose and Krishnapuram—grown in Karnataka and Andhra Pradesh.

Opening of onion exports came within days of Agriculture Minister Sharad Pawar and Maharashtra Chief Minister Prithviraj Chavan approaching Commerce Minister Anand Sharma to lift ban on onion export following farmers’ stir in Nashik against crashing prices.