Govt slashes onion export price to $350 per tonne

The government today slashed the minimum export price (MEP) for onion, for the second time this month, to $350 per tonne from $450 per tonne earlier.

"MEP of onion, other than Bangalore Rose Onions and Krishnapuram onions, will be $350 per metric tonne," the Directorate General of Foreign Trade said in a notification.

On March 1, the MEP was brought down to $450 per tonne from $600 a tonne.

Last month, the government had lifted ban on onion exports after farmers protested a crash in domestic prices. It, however, capped the MEP at a higher level of $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.

The government had imposed a ban on export of the kitchen staple after its prices skyrocketed and touched as high as Rs 80-85 per kg.

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 said the MEP for Sona Masuri and Ponni Samba -- varieties of non-basmati rice -- will be $850. However, no MEP has been prescribed for Matta rice.

Partially lifting a three-year old ban on export of non-basmati rice, the government had permitted overseas shipments of Ponni Samba and Matta varieties of basmati, subject to a cap of 25,000 tonne each. Shipments of one lakh tonne of Sona Masuri were permitted last month.