Agri Business

Govt lifts onion export ban; decision on sugar export deferred

Our Bureau New Delhi | Updated on February 25, 2011

Onion being dumped at a wholesale market in Tiruchi: Photo: R.M. Rajarathinam   -  Business Line

The Centre on Thursday 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 rise of the item.

The decision, taken by an Empowered Group of Ministers (EGoM) on food, follows onion prices crashing in the local market, leading to protests by farmers in producer States like Maharashtra.

The Government had last week lifted the export ban on Rose and Krishnapuram varieties of onion grown in Karnataka and Andhra Pradesh respectively.

But soon after, the Maharashtra Chief Minister, Mr Prithviraj Chavan, and the Union Agriculture Minister, Mr Sharad Pawar, called for completely lifting the ban on onion exports citing the farmers' agitation. They also demanded that the sugar exports ban be totally scrapped.

The EGoM headed by the Finance Minister, Mr Pranab Mukherjee, however, deferred its decision on the proposal to permit 5,00,000 tonnes of white sugar exports under the open general licence. Sources said a call will be taken in the next EGoM meeting.

The Government had, in December 2010, banned exports of onion and removed import duty on the item following its prices more than trebling in a short span in the retail market to over Rs 70 a per kg. This was due to a shortage caused by late rains that affected the crop in some onion producing regions.

Fall in prices

However, prices have now fallen to around Rs 4-12 a per kg with fresh supplies of late-sown varieties arriving in the local market. Prior to banning the exports of onion totally, the Government had increased its minimum export price of the item from $525 a tonne to $1,200 a per tonne to discourage exports.

Around 11.5 lakh tonnes of onion were exported from the country India during April-December 2010 against 14 lakh tonnes during the corresponding period in 2009.

The Agriculture Ministry expects onion production to be around 132 lakh tonnes, up from 125 lakh tonnes last year. India is the world's second largest onion producer.

The Ministry had also pitched for allowing sugar exports with the sugarcane production estimates likely to be 336.7 million tonnes in 2010-11 from 292.3 mt million tonnes a year ago. Though Mr Pawar in December had announced permitting exports of 5,00,000 tonnes of sugar under OGL in addition to one mt of shipments allowed against advance licences, high food inflation forced the Government to hold back the decision.

Published on February 17, 2011

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