The Agriculture and Commerce Ministries do not want onion exports to be banned as there has been a fall in outbound shipments following the imposition of minimum export price (MEP) last month.

The inter-ministerial committee on onions, which met last Friday, however, decided to keep a close watch on the movement of domestic prices and exports to take timely policy decisions when required.

Union Minister for Food and Consumer Affairs Ram Vilas Paswan had asked the Commerce Ministry to ban exports of onions before importing to ease rising prices.

Export and production

“Export of onions from the country is never more than 10 per cent of total production. After the imposition and upward revision of the MEP, exports have come down further. But we are keeping a close watch on the situation and would take an appropriate decision whenever required,” a Commerce Ministry official told BusinessLine .

In June, an MEP of $300 a tonne was imposed on onions to stop export of the cheaper varieties.

It was increased to $500 a tonne early this month.

Higher onion production last season that ended in July, estimated at a record high of 19.2 million tonnes, should also play a role in assuaging fears of a supply short-fall, the official said.

Wholesale price of onion at Lasalgoan in Maharashtra has risen by over 50 per cent to about ₹20 a kg compared with less than ₹14 a kg last month. Retail prices in Delhi have nearly doubled to ₹30-40 a kg compared with prices in May.

Rise in demand

“One important reason behind the rise in prices is an increase in demand. With more people now able to afford onions, the demand is higher. This factor cannot be ignored,” the official said.

Hoarding is another problem that the Government is struggling to deal with. Paswan, last week, called for stringent rules in all States to check hoarding. He said the Essential Commodities Act should be amended to raise imprisonment for hoarders from six months at present to a year.

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