Seven months after its abolition, the government is considering levying the Minimum Export Price (MEP) on onions once again, trade sources believe.
The government is all set to levy MEP at $700 a tonne to discourage exports from India. This is because of shortage of good quality onion in the recently ended kharif season and the ongoing rabi harvesting season, which hiked its prices by up to 250 per cent in the week between January 5-10, 2013 compared to the same period last year.
The government had abolished the MEP on onion in May 2012, thereby, allowing traders to take advantage of rising prices in the global markets.
But traders are not happy with the likely move. Currently, Indian exporters are executing orders from Middle Eastern importers at $420 a tonne. At $700, therefore, Indian orders which already have been low, would be shifted to countries like Pakistan, said a trader.
“Onion exported from Pakistan is cheaper by $30-40 a tonne than India. An MEP levy of $700 would further deteriorate export opportunities,” said Ashok Walunj, director of Agricultural Produce Marketing Committee (APMC), Vashi.
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Meanwhile, R P Gupta, director of National Horticulture Research and Development Federation (NHRDF) predicts normal supply of onions in the country this year with an output estimate of 17.4 million tonnes — unchanged from last year.
Blaming traders for artificial price rise, Gupta said that around 10 per cent decline in acreage would be compensated with higher recovery.
First advanced estimates, however, forecast India’s onion output between 16.4 and 16.6 million tonnes which is likely to be revised upwards in the second crop assessment next month.
