Govt steeply hikes minimum export price for onion to $425/tonne

Government today increased sharply the minimum export price (MEP) of onion by USD 175 per tonne to USD 425 per tonne to ensure adequate domestic supply and contain price rise.

"Export of all varieties of onions...Will be subject to a MEP of USD 425 FOB (freight on board) per tonne," Directorate General of Foreign Trade (DGFT) said in a notification.

The new MEP - rates below which no exports are allowed - will be applicable with immediate effect.

The government imposes MEP to restrict outbound shipments and check price rise in the domestic market.

The wholesale price of onion have risen to Rs 16-17 per Kg from Rs 11 per kg in last one month at Lasalgaon in Maharashtra -- Asia's biggest onion market.

The wholesale prices have started increasing in view of marginal fall in the domestic production, which is estimated at 189.23 lakh tonnes for 2014-15 crop year (July-June), as against 194 lakh tonnes in the previous year, as per the government data.

The country's onion exports declined to 10.86 lakh tonnes in the 2014-15 fiscal due to high MEP, as against 13.58 lakh tonnes in the previous year.