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Harish Damodaran

New Delhi , Oct. 31

CONTRARY to the general belief, no decision has been taken by the Government on freeing export of onion.

This is even after the Union Cabinet's recent approval for removing the commodity from the purview of the Essential Commodities Act, 1955 (ECA).

"We have not issued any notification for freeing onion exports and neither have we received any communication in this regard," the Director-General of Foreign Trade, Mr K.T. Chacko, told Business Line. In other words, onion exports would continue to be canalised through the National Agricultural Cooperative Marketing Federation of India (Nafed) and other designated State Trading Enterprises (STE).

As before, exporters (who are registered `associate shippers' of the STEs) would have to seek a no objection certificate (NOC) for each consignment, for which they have to furnish details of quantity and variety to be exported, export rate and port of loading and destination, copies of advance remittance or irrevocable letters of credit, etc.

On top of this, for obtaining the NOC, they would have to pay `levy service charges' to the STE concerned at the rate of one per cent of the invoice value.

If all this were not enough, all onion exports will still be subject to a minimum export price (MEP) fixed every month by Nafed and varying according to destination, mode of shipping and the variety being exported.

To illustrate, the current MEPs to Dubai, Sharjah and Abu Dhabi are $185 per tonne c&f for break bulk and $200 per tonne for containers, while the corresponding rates to Bahrain, Kuwait and Jeddah are $210 and $225 per tonne.

Onions shipped to the Philippines similarly attract MEPs of $200 per tonne by ordinary containers and $275 per tonne by reefer containers.

The MEPs for premium quality Bangalore Rose and Krishnapuram onions of 27 mm and above shipped to Singapore, Malaysia and Sri Lanka are $280 per tonne by break bulk and $300 per tonne by containers.

"We were under the impression that exports have been freed from all these requirements, which only raise transaction costs. Instead, all that has been done is to remove onions from the ECA, which only has symbolic and no real meaning," a Mumbai-based exporter said.

According to him, there are virtually no restrictions with regard to movement or storage of onions within the country and neither have the Centre nor State Governments issued any Control Order since 1999 for regulating internal distribution or pricing of the commodity.

Till 2002-03, export of onions was also subjected to an annual ceiling of seven lakh tonnes (lt), with actual exports during that year amounting to 5.89 lt, valued at Rs 362 crore.

But following the lifting of the ceiling, exports last year are estimated to have touched 7.5 lt, valued at about Rs 650 crore.

Exporters say that permitting private players to export on their own account would have provided a big boost to farmers, who are currently suffering on account of a glut with production this year crossing 50 lt.

More Stories on : Horticulture/Fruits & Vegetables | Agricultural Policy | Exports & Imports

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