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The government on Thursday slashed the minimum export price (MEP) of onion by more than half to $150 a tonne, an indication that further actions were likely.
The move came after Agriculture Minister Sharad Pawar met Commerce Minister Anand Sharma on Wednesday, as the vegetable saw a sharp decline in wholesale prices in Maharashtra.
An official statement said: “After reviewing the situation of arrivals in the producing and major consuming mandis, retail and wholesale modal rates as well as foreign trade scenario, inter alia, it was decided to further reduce the MEP from $350 a tonne to $150 per tonne.”
The government also said officials would meet regularly and closely monitor the arrivals, wholesale modal prices and retail prices of onion.
“The government will make appropriate interventions as and when required to ensure price stability for consumers and adequate domestic availability of onions, along with price protection for farmers, with a view to balance the interests of both farmers and domestic consumers,” the statement said.
Last week, the government had cut the MEP of onions by more than half to $350 a tonne from $800 a tonne. This month, the government had slashed the MEP to $800 a tonne from $1,150 a tonne.
Surging onion prices were thought to be one of the prime reasons for the recent Assembly election rout of the Congress, particularly in Delhi.
On August 14, the government had imposed a floor export price of $650 a tonne and increased it to $900 in September and $1,150 in November.
Wholesale Price Index-based inflation in onion was at 100 per cent for six months ended November. It stood at 336 per cent in September and then came down to 278.21 per cent in October and to 190.34 per cent in November. Prices started crashing from late November.
The average all-India wholesale price of onion fell to Rs 28.52 a kg in December from Rs 46.08 a kg the previous month. Prices crashed severely in Nashik and parts of Maharashtra.
Even after the commerce department had reduced the minimum export price to $300 a tonne last week, Pawar had asked the commerce ministry to scrap the minimum export price for onions to help boost exports. Farmers in producing states such as Maharashtra have been protesting and have made representations to Pawar for the removal of export restrictions.
