In a move aimed at preventing the shortage of onions in the local market and easing spiralling prices, the government has banned exports of onions below $850/tonne till the end of December.

“Exports of all varieties of onions will be allowed only on Letter of Credit subject to a minimum export price of $850 [freight on board] per tonne till December 31 2017,” according to a notification from the Directorate General of Foreign Trade on Thursday.

This was $150 more than what the Food and Consumer Affairs Ministry had recommended to the Commerce Ministry.

Price rise

On Wednesday, Food Minister Ram Vilas Paswan said his ministry had sought the re-imposition of MEP, which was scrapped in December 2015, and recommended a floor price of $700/tonne. The decision to restrict onion exports was taken because the price of this kitchen staple was rising.

In most parts of the country, it is retailing at ₹50-65/kg due to supply crunch. Prices are expected to ease once kharif onions hit the market. But erratic rainfall, and a 30 per cent reduction in kharif onion acreage, have affected the arrivals, which have dwindled to nearly a third.

According to a trader in Maharashtra’s Lasalgaon, the largest onion wholesale market in Asia, daily arrivals are 30,000-40,000 gunny bags (of 45-50 kg), against the normal of about 1-1.5 lakh bags.

Import

According to Paswan, the Food Ministry has already directed the State-owned MMTC to import 2,000 tonnes and has asked two other agencies – Nafed and Small Farmers Agri-business Consortium – to procure 10,000 tonnes and 2,000 tonnes locally.

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