GOVT HIKES MINIMUM EXPORT PRICE OF ONION TO CHECK DOMESTIC MARKET RATE
In an effort to curb soaring prices of onion in the domestic market, the government has increased the minimum export price (MEP) of onion by more than 140% from $175 per tonne to $425 a tonne.
“Export of all varieties of onions will be subject to a MEP of $425 FOB (freight on board) per tonne,” a report said citing a notification issued by the Directorate General of Foreign Trade (DGFT).
According to officials, the move will discourage onion traders to sell the produce abroad, resulting in adequate supply in the domestic markets.
In the wholesale markets within the country, the price of onion has increased from Rs 11,000 ($173) per tonne to Rs 17,000 ($268) in the last one month. Experts attribute this upward price trend to damage of crops by un-seasonal rain during the current crop year July 2014-June 2015.
The government has estimated the total production of onion this year at 189.23 lakh tonne, which is lower than 194 lakh tonne produced in the previous year.
If the price in the international market is more than domestic price, traders tend to sell onion to foreign buyers to earn more profit. This leads to shortage of supply and rise in prices within the country.
A sharp hike in MEP will make Indian suppliers un-competitive in the international market against their counterparts mainly from China and Pakistan. China is the largest onion exporter having a market share of 40%. Indian onion export has 20% share in the global market, while Pakistan’s share is around 27%.