The Government has reduced the minimum export price (MEP) of onions to $450 a tonne from the earlier $600.
In a notification, the Directorate-General of Foreign Trade said: “The MEP of onions, other than Bangalore Rose onion and Krishnapuram, will be $450 a tonne f.o.b. (free on board). Earlier it was $600 a tonnes.”
The MEP on Bangalore Rose and Krishnapuram varieties is $1,400 a tonne and their exports have been allowed through the State Trading Enterprises.
Last week, the Union Agriculture Minister, Mr Sharad Pawar, had said that the MEP of $600 a tonne was almost double the current rate in international markets for the item, making exports uncompetitive.
Curbing price rise
An Empowered Group of Ministers (EGoM) on food had last month decided to completely lift the ban on onion exports, but kept a minimum export price of $600 a tonne as a precaution against further price spike.
The EGoM decision followed after wholesale prices of onion crashed in the domestic market, leading to protests by farmers in Maharashtra. Prices had fallen to around Rs 4 a kg with the arrival of fresh supplies of late-sown varieties.
A week before that decision, the Government had lifted export ban on Rose and Krishnapuram varieties of onion grown in Karnataka and Andhra Pradesh respectively.
Soon after, the Maharashtra Chief Minister, Mr Prithviraj Chavan, and Mr Pawar sought total lifting of the export ban, citing the farmers' agitation.
The Government had in December 2010 banned exports of onion and scrapped import duty of the item after its prices surged over Rs 70 a kg. Before the total ban on onion exports, the Government had increased the minimum export price of the item from $525 a tonne to $1,200 a tonne to discourage exports.