Govt slashes MEP on onions to $450 per tonne

In major relief for exporters, the government has slashed the Minimum Export Price (MEP) for onions by 25% to $450 per tonne from $600.

"MEP of onions other than Bangalore Rose onions and Krishnapuram will be $450 per tonne freight on board," the Directorate General of Foreign Trade said in a notification.

Last month, the government had lifted a ban on onion exports after farmers' protested a crash in domestic prices, but restricted overseas sales by capping the MEP at $600 per tonne as a precautionary measure to control local prices, which had shot up to Rs 70-80 per kg in December last year.

However, Agriculture Minister Sharad Pawar had subsequently indicated that the MEP of $600 per tonne was almost double the prevailing rate in international markets, rendering them uncompetitive. The MEP for Bangalore Rose and Krishnapuram onions was $1,400 per tonne.

In this regard, the DGFT notification appears to be aimed at rectifying the situation.

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

Furthermore, the DGFT -- the arm of the Commerce Ministry that deals with export and import-related matters -- also 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 Chennai and Vishakhapatnam sea ports with a quantity cap of 50,000 tonne from each port.

While 25,000 tonne of 'Ponni Samba' exports were permitted from Tuticorin sea port, a similar quantity of 'Matta' was allowed from the Cochin sea port, it said.

"The export would be in consumer packs of up to 10 Kg each (not more than 10 kg per pack)," the DGFT said, adding that shipments would be allowed only during the kharif marketing season (KMS) 2010-11, that is, up to September 30.

In addition, a maximum quantity of 5,000 tonne of all three varieties would be allowed for export, as per the IEC (Import/Export Code).

Customs will draw necessary samples and get them tested for quality analysis from AGMARK Laboratories, it said, adding that a copy of the test report should be sent to the concerned regional authorities, who would keep a watch for possible violation or misdeclaration and take necessary action.